The Washington State Department of Labor & Industries (L&I) is proposing a 4.9 percent increase in the average hourly rate employers and workers will pay for workers’ compensation insurance next year. If adopted, the increase would mean employers and workers on average would jointly pay an additional $65 a year for each full-time employee within a business.
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“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,” L&I Director Joel Sacks said.
The proposed increase is below what L&I expects to pay for 2024 claims, so the agency will augment the premiums with funds from the workers’ compensation contingency reserve.
A typical worker will continue to pay about a quarter of the premium, similar to 2023. The proposed increase means employees would pay about $11 more on average in 2024.
In part, the rate increase is needed because Washington has had higher-than-normal increases in the state’s average wage in recent years.
“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. “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.”
This will be the fourth year that L&I has reduced the impact on employers and workers struggling from the pandemic by tapping the contingency reserve to avoid larger increases in premiums. If the agency did not tap into the reserve, it would need to raise average rates nearly 10 percent to collect enough premiums to cover new claims in 2024.
How Washington’s rates system compares with other states
Employers and workers pay into the workers’ compensation system to fund wage and disability benefits and medical coverage for work-related injuries and illnesses.
Most states charge rates as a percentage of payroll, so when employee wages go up, those states automatically collect more premiums. Washington charges workers’ compensation rates as an amount per hours worked. When wages go up, the rate paid stays the same. The average wage of Washington state workers is expected to increase in 2024, resulting in increased costs in the system. The rate increase helps to cover those costs.
Public hearings planned
Public hearings are scheduled for Oct. 26, 27, and 31 to take input on the rate proposal before a final decision is made. The Oct. 26 hearing will be held at 10 a.m. virtually and in person at L&I headquarters in Tumwater. The Oct. 27 hearing will be held at 9 a.m. in person only in Spokane. The Oct. 31 hearing will be held at 10 a.m. in person only in Yakima. Final rates will be adopted on Nov. 30 and go into effect Jan. 1, 2024.
Hearing details
10 a.m., Oct. 26, 2023
L&I Headquarters, Rooms S117, S118, S119
7273 Linderson Way SW
Tumwater, WA
OR
Join electronically:
https://lni-wa-gov.zoom.us/j/
Meeting ID: 846 8256 2930
Passcode: Oct2623!
Join by phone (audio only):
253-215-8782 US (Tacoma)
Meeting ID: 428 348 2697
9 a.m., Oct. 27, 2023
CenterPlace Event Center Auditorium
2426 Discover Pl
Spokane Valley, WA
10 a.m., Oct. 31, 2023
Yakima Convention & Event Center, Room B
10 North 8th Street
Yakima, WA
People are encouraged to submit comments in writing to: Jo Anne Attwood, administrative regulations analyst, P.O. Box 41448, Olympia, WA 98504-4148; or email JoAnne.Attwood@Lni.wa.gov. All comments must be received by 5 p.m. on Oct. 31.
More information about the proposal is available at www.Lni.wa.gov/2024Rates.
Workers’ comp facts:
- L&I workers’ compensation insurance covers about 2.66 million workers and nearly 198,000 employers in Washington.
- The proposed rate is an average. An individual employer’s actual rate change may be more or less depending on that employer’s industry and history of claims that result in wage replacement and/or disability benefits.
