L&I announces 3.8% increase in Washington Workers' Compensation Rates for 2025

Washington state employers and workers will see their workers' compensation insurance premiums rise by an average of 3.8% in 2025, the state Department of Labor & Industries (L&I) announced.

The increase, which takes effect January 1, translates to approximately one dollar per week more for each full-time position, with workers continuing to shoulder about a quarter of the premium costs.

"This modest change helps us cover the higher cost of crucial wage and medical benefits for workers, while keeping rates steady and predictable," said L&I Director Joel Sacks. He added that the increase would help ensure the "financial health and dependability" of the state's workers' compensation system.

The rate adjustment follows public hearings held in October, including a hybrid session at L&I headquarters in Tumwater and an in-person meeting in Spokane, where business and labor representatives provided testimony.

Unlike most states that calculate premiums as a percentage of payroll, Washington uses an hourly rate system. Individual industry rates may vary from the 3.8% average based on recent claims history.

To minimize the impact of the increase, L&I plans to draw from its workers' compensation contingency reserve to offset the gap between premium revenue and expected 2025 claims and expenses. The agency maintains this reserve to help stabilize rates and manage costs.

The department cited several factors in determining the new rates, including anticipated benefits costs, wage and benefit inflation, operational expenses, investment income, and other financial indicators.

L&I has implemented various cost-control measures, including workplace injury prevention programs, early intervention in claims processing, and employer incentives for returning injured workers to their jobs.

The agency provides detailed information about the 2025 rates on its website at www.Lni.wa.gov/Rates.