WA Labor & Industries Proposes 4.9% Workers' Comp Rate Hike

TUMWATER – The Washington State Department of Labor & Industries (L&I) has put forth a proposal to raise the average hourly rate for workers' compensation insurance by 4.9 percent in the upcoming year. If approved, this increase would require employers and workers to collectively contribute an additional $65 per full-time employee annually within a business.

Joel Sacks, the Director of L&I, emphasized the delicate balance they are striving to achieve. “With help from our reserves, we’re finding a balance between charging enough to cover costs and keeping rates steady and predictable as Washington employers deal with economic uncertainty and lingering impacts of the pandemic,” Sacks stated.

While the proposed increase is slightly below L&I's anticipated 2024 claims costs, the agency intends to supplement the premiums using funds from the workers' compensation contingency reserve.

The burden on individual workers is expected to remain relatively stable, with employees still covering about a quarter of the premium, similar to the current year. However, the proposed increase would translate to an average of approximately $11 more per employee in 2024.

One contributing factor to this rate adjustment is the recent trend of higher-than-normal increases in the state's average wage. “It's good for workers that wages are rising, but that means the cost of replacing wages when a worker gets hurt goes up too,” Director Sacks explained. He also highlighted the strong performance of the workers' compensation State Fund investments, which allows them to allocate returns to cover costs instead of passing the burden onto employers.

This marks the fourth consecutive year that L&I has turned to the contingency reserve to alleviate the strain on employers and workers impacted by the pandemic, preventing more substantial increases in premiums. Without utilizing the reserve, L&I would need to raise average rates by nearly 10 percent to meet the demands of new claims in 2024.

In Washington, employers and workers contribute to the workers' compensation system, funding wage and disability benefits and medical coverage for work-related injuries and illnesses. Unlike most states that charge rates as a percentage of payroll, Washington calculates rates based on the number of hours worked. Consequently, when wages increase, the rate remains constant, leading to increased costs in the system. The proposed rate increase aims to offset these rising expenses.

Public hearings are scheduled for Oct. 26, 27, and 31 to gather input on the rate proposal before a final decision is reached. The Oct. 26 hearing will be held virtually and in person at L&I headquarters in Tumwater at 10 a.m. The Oct. 27 hearing is scheduled for 9 a.m. and will be held in person only in Spokane. Finally, the Oct. 31 hearing will occur at 10 a.m. in person only in Yakima. The final rates will be adopted on Nov. 30, with the changes going into effect on Jan. 1, 2024.

Interested parties can also submit written comments to Jo Anne Attwood, administrative regulations analyst, at P.O. Box 41448, Olympia, WA 98504-4148, or via email at JoAnne.Attwood@Lni.wa.gov. All comments must be received by 5 p.m. on Oct. 31.

For more information about the proposal, visit www.Lni.wa.gov/2024Rates.