L&I plan calls for employees, businesses to pay more for workers compensation in 2024

Workers and employers will pay more for workers compensation insurance next year if a new proposal from the Department of Labor and Industries is adopted.

Jointly, workers and employees would pay an additional $65 per year for each full-time employee, a 4.9% increase from current rates.

The agency said in a news release Tuesday that the increase are necessary due to “higher-than-normal increases in the state’s average wage in recent years.”

A typical worker pays about a quarter of the premium and could expect to see an $11-per-year increase in 2024. Employers would pay the rest of the increase.

L&I’s proposal would not pass the full increased cost on to workers and employers. It plans to augment premiums with funding from the workers’ compensation contingency reserve because the “proposed increase is below what L&I expects to pay for 2024 claims.”

“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,” said L&I Director Joel Sacks in a statement.

The agency noted that this is the fourth year they have tapped into contingency reserves to avoid larger increases in premiums in order to reduce the impact on employers and workers struggling from the pandemic. Average rates would need to be raised nearly 10% to cover all of the claims if the reserve was not used.

Unlike most other states, workers in Washington are charged compensation rates as an amount per hours worked. Most states charge rates as a percentage of payroll, so when employee wages go up, those states automatically collect more premiums.

“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,” Sacks said in the statement. “Our workers’ compensation State Fund investments are performing well, so we’re able to use the returns to help cover costs again this year instead of passing it on to employers.”

Final rates will be adopted on Nov. 30 but L&I will conduct public hearings before a final decision will be made.

Hearings are planned for:

  • 10 a.m. Oct. 26 at L&I headquarters, 7273 Linderson Way SW, Tumwater; via Zoom, Meeting ID: 846 8256 2930, Passcode: Oct2623! or via phone at 253-215-8782, Meeting ID: 428 348 2697.

  • 9 a.m. Oct. 27 at the CenterPlace Event Center Auditorium in the Spokane Valley.

  • 10 a.m. Oct. 31 at the Yakima Convention & Event Center.

Final rates will go into effect on Jan. 1.