Tumwater, WA – The Washington State Department of Labor & Industries (L&I) recently announced that it is proposing a 4.9 percent increase in the average hourly rate employers and workers pay for workers’ compensation insurance in 2027.
If adopted, the proposed increase would raise the cost of coverage by about $1.44 a week per full-time employee, on average. Employers pay about 75 percent of the premium, and workers pay about 25 percent.
The proposed increase would help pay for the rising cost of providing wage replacement and medical care benefits when a worker is injured on the job or develops a work-related illness.
As in previous years, L&I is not proposing passing along the full projected cost increases on to the businesses and workers who pay premiums into the system. The agency would use funds from the workers’ compensation contingency reserve to cover the potential difference between what the rate increase will bring in and what projected costs will be.
“The cost of providing workers’ compensation coverage continues to go up as wages and medical costs increase,” said L&I Director Joel Sacks. “Still, we’ve worked hard over the last several years to keep rates steady and predictable for businesses while making sure the fund remains healthy enough to help workers heal and return to work.”
L&I uses the state wage inflation average as an important benchmark to help determine workers’ comp premiums. The agency also considers other factors including medical costs, wage replacement costs, and other financial indicators.
Sacks said the contingency reserve is doing what it was meant to do by keeping the workers’ compensation system financially stable while protecting employers and workers from big, sudden rate spikes.
L&I offers programs to help employers better manage their costs, as well as assistance for injured workers to heal and get back to work more quickly, which helps limit cost increases. The agency also provides financial incentives to employers who reduce workplace injuries.
For its part, L&I is focusing on achieving better outcomes and reducing long-term costs by working to improve claims service, strengthen return-to-work efforts, reduce claims-manager caseloads, and modernize aging technology.
Washington’s Rate System
Most employers and workers pay into Washington state’s workers’ compensation system to cover wage and disability benefits and medical costs for work-related injuries and illnesses.
In many states, rates are charged as a percentage of payroll. When wages go up, those states automatically collect more in premiums instead of raising rates. Washington bases workers’ compensation premiums on hours worked. So, when wages go up, the employer and worker contributions stay the same. That’s why when wages and medical costs climb in our state, L&I raises rates to keep up.
Public Hearings Planned
People in Washington have opportunities to provide input before L&I makes a final decision on workers’ compensation rates. Public hearings are scheduled for Oct. 27, 28, and 29. The hearings start at the designated time and will continue until all oral comments are received.
10 a.m., Oct. 27 (in-person only)
L&I Headquarters, Room S119
7273 Linderson Way SW
Tumwater, WA 98501
10 a.m. Oct. 28 (virtual only)
Join electronically:
https://lni-wa-gov.zoom.us/j/5484210584?omn=86303294900
Meeting ID: 548 421 0584
Join by phone (audio only):
253-215-8782 US (Tacoma)
Meeting ID: 548 421 0584
2 p.m., Oct. 29 (virtual only)
Join electronically:
https://lni-wa-gov.zoom.us/j/5484210584?omn=87399160603
Meeting ID: 548 421 0584
Join by phone (audio only):
253-215-8782 US (Tacoma)
Meeting ID: 548 421 0584
People can also provide written comments. Send them 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. 29.
Final rates will be adopted on Nov. 30 and go into effect Jan. 1, 2027.
Source: WA L&I