Washington L&I Proposes 2.7% Average Rise in Workers’ Comp Rates in 2014

September 17, 2013

The Department of Labor & Industries (L&I) has proposed an average 2.7 percent rate increase for 2014 workers’ compensation premiums, an increase of less than 2 cents per hour worked.

Over the past two years, workers’ compensation surveys have shown an increase in rates nationally. This will be Washington L&I’s first rate increase in three years.

Cutting Workers’ Compensation Costs

“This proposal is part of a long-term plan to ensure steady and predictable rates, help injured workers heal and return to work, and reduce costs by improving operations,” said L&I Director Joel Sacks. “My goal is to reduce costs by an additional $35-70 million in 2014.”

Work underway to cut costs includes:

· Helping injured workers return to work as soon as they are medically able.

· Improving L&I’s workers’ compensation claims processes.

· Improving workplace safety.

· Improving medical care and reducing long-term disability.

· Making it easy to do business with L&I.

Keeping Rates Steady

“I want wage inflation to be our benchmark for steady and predictable rates,” said Sacks. “Wage inflation is a good benchmark because workers’ comp costs increase as wages increase.”

Washington’s most recent wage inflation number is 3.4 percent. However, because Washington’s rates are based on hours worked and not payroll like other states, Washington needs to raise rates to get the revenue that other states get automatically.

“We must also continue to restore the state’s workers’ comp reserves that were used to hold down rates during the Great Recession,” Sacks added.

The department’s Workers’ Compensation Advisory Committee, made up of business and labor representatives, agreed to a plan to restore reserves over the next several years.

Public hearings on the proposed rates will be held in late October. Final rates will be adopted in early December and go into effect Jan. 1, 2014.

Source: Washington Department of Labor & Industries

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