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L&I and ESD Accounts When You Sell a Washington Business

By the Seattle Business Brokers Desk · Updated October 16, 2026

Washington runs its own workers' comp fund through L&I, and its own unemployment program through ESD. Both accounts carry history that a buyer cares about.

Seattle Business Brokers Desk explains what moves with the business and what you close.

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The short answer

  • A buyer of all or part of your business also takes on its workers' comp claim history, which can raise their rates
  • L&I only releases your injury and cost profile to you, so buyers will ask you to request it
  • To close your ESD unemployment account, send the Business Change Form with the sale document
  • File a final ESD quarterly report within 10 days of closing the account, even with no payroll
  • In a stock sale, update ownership with ESD instead of closing the account
In this guide
  1. Two State Agencies, Two Accounts
  2. L&I: The Buyer Inherits Your Claims History
  3. Why Buyers Ask You for the Records
  4. Updating L&I
  5. ESD: Closing the Unemployment Account
  6. When Experience Transfers
  7. Stock Sales Are Different
  8. Paid Leave and WA Cares
  9. Common Mistakes
  10. Where This Fits

Two State Agencies, Two Accounts

Most Washington employers have a workers' compensation account with the Department of Labor and Industries (L&I) and an unemployment insurance account with the Employment Security Department (ESD).

Washington is one of the few states where most employers buy workers' comp from the state fund rather than a private insurer. That makes L&I's records central to a sale.

L&I: The Buyer Inherits Your Claims History

L&I tells buyers plainly: when you buy an existing business, or part of one, you also buy its workers' comp claim liabilities and the risk of higher premium rates.

A buyer can also become responsible for premiums the seller owed L&I. That gives buyers two reasons to look closely at your account.

  • Your experience factor, which reflects past claims and shapes future premiums
  • Open claims and the costs still being paid on them
  • Whether every quarterly report and premium payment is current

Why Buyers Ask You for the Records

L&I only gives account details, such as an injury and cost profile, to the current business owner. A potential buyer can't get them directly.

So buyers ask the seller to request those records from L&I's employer services and share them. Ask early, so the request doesn't hold up diligence.

If you have high claim costs, expect the buyer to factor the higher premiums into the price, or to ask for a holdback.

Updating L&I

L&I works from business information kept with the Department of Revenue's business licensing system. Location and ownership changes generally need to be updated with the Department first.

Then contact your L&I account manager about the sale. Keep filing quarterly reports and paying premiums through the date of the sale.

ESD: Closing the Unemployment Account

In an asset sale, your company stops being the employer and the buyer becomes one. ESD's steps for closing your unemployment tax account are specific:

  1. Complete ESD's Business Change Form.
  2. Attach the sale document if you sold the business.
  3. Return it by email, mail or fax as the form directs.
  4. File a final quarterly report within 10 days of closing the account, even if you had no payroll that quarter.

When Experience Transfers

Your unemployment experience, meaning the benefits charged to your account, sets your tax rate. In some sales that experience moves to the buyer.

A buyer that was already a Washington employer can take on the experience of the part of the business it acquired, if it qualifies. Ownership that stays substantially the same carries the predecessor's rate. ESD decides based on the facts.

Stock Sales Are Different

If the buyer buys your shares or membership interests, the company stays the employer. Instead of closing the account, you submit ESD's Update Ownership Information form for the new owners or officers.

The same idea applies with L&I: the account continues, with the buyer now in charge of it.

ESD also collects premiums for Paid Family and Medical Leave and the WA Cares long term care program. Handle those reports at the same time as the unemployment account, so nothing is left open.

Common Mistakes

  • Stopping quarterly reports before the sale date, which leaves gaps on the account
  • Forgetting the final ESD report because payroll already ended
  • Waiting until diligence to request L&I records

A short call to each agency before closing usually prevents all three.

Where This Fits

Employer accounts sit alongside the Department of Revenue clearance and the Seattle final return on most closing checklists. Industries with heavy labor, like tree care, feel the L&I side most.

To find out what your company could sell for, use the price check form or call (206) 555-0171.

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