News for Small Business - News for L&I small business customers and tips for saving time and moneyI
December 2007

2008 workers' comp hourly premiums rise an average 3.2 percent

Wage and medical inflation is driving a 3.2 percent average increase in 2008 Washington workers’ compensation hourly rates.

L&I Director Judy Schurke said a 5.4 percent increase in the statewide average wage and a 5.9 percent increase in healthcare costs (compared to a 7.7 percent national average for workers’ comp insurers) made the increase necessary. Wage replacement and health care benefits are L&I’s two biggest expenses, consuming about 85 percent of the premiums L&I collects each year.

Individual employers could see their rates go up or down, depending on their recent claims history and changes in the frequency and cost of claims in their industry.

Rate notices are being mailed to employers. Click on the following link for the average base rates in your industry.

If you need to know your company’s specific rate before you receive your 2008 rate notice you can call your L&I account manager. His or her phone number is on your most recent quarterly statement. 

L&I also will fully implement a change in the formula it uses to determine an employer’s “Experience Modification Factor,” so that an employer’s rates more accurately reflect their claim experience.  Some employers have seen their experience modification factor go down in 2007 because of this change, while others will see an increase starting in 2008.

New rate notice easier to read, has more information

Rate Notice Example
Workers' Compensation Rate Notice Example.

A new, easier-to-read workers’ compensation annual rate notice will soon be in the hands of business owners. The new rate notice was redesigned with the help of accountants and business owners as part of L&I’s effort to provide “Plain Talk” information to its customers.

Our goals:

  • Make it easier to read, especially for new business customers.
  • Clearly indicate when a customer has a claim-free discount (worth 10-40%).
  • Congratulate claim-free employers for having a safe workplace (80 percent of L&I customers enjoy this discount)
  • Clearly explain and define the words used on the notice
  • Promote the Claim and Account Center, where employers can get detailed information about their claims and workers’ compensation accounts (www.ClaimInfo.Lni.wa.gov).

All of the changes, and some decisions not to make changes, were reviewed and tested by actual employers. For example, one change we made at the suggestion of the employers was to add a column that lists the employer's contribution to the rate, so business owners don't have to do the math when filling out quarterly reports.

More is on the way. We’re currently working on improvements to the online Express Filing system and the quarterly reporting form. Both will be reviewed and “reality tested” by employers before they’re released.

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Legislation bars use of vacation and sick pay for kept-on-salary

The state Legislature has placed new limits on the “kept-on-salary” strategy used by many employers to reduce the cost of a workers’ compensation claim.

This alternative to time-loss payments can benefit both the injured worker and employer.  Keeping an injured worker on regular salary and benefits helps the worker stay financially solvent while potentially helping an employer to preserve their claim-free discount or significantly reduce the impact of a claim on workers’ compensation rates. 

In 2007, the state Legislature made an adjustment to this practice.  It specified that employers cannot require a worker to use vacation, holiday, or sick pay as kept-on-salary compensation while recovering from an injury.  In effect, the new law requires an employer to treat a kept-on-salary injured worker the same as an employee who is still reporting to work.  The change took effect on July 22.

Kept-on-salary is becoming increasingly popular with employers because of the major benefits they receive by maintaining a claim-free discount.  The discount applies when an employer has no claims that require wage replacement, a pension, or a partial permanent disability payment.  A claim-free discount reduces an employer’s workers’ compensation rates by 10-40 percent, depending on the number of hours the employer reports.

Minimum wage rises to $8.07 on January 1

Washington’s minimum wage will increase 14 cents to $8.07 an hour beginning Jan. 1, 2008.

L&I recalculates the state’s minimum wage each year as required by Initiative 688, which was approved by Washington voters in 1998. The law requires that the state minimum wage be adjusted each year according to the change in the federal Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) during the 12 months ending each Aug. 31.

The CPI-W is a national index covering the cost of goods and services needed for day-to-day living. It increased 1.8 percent during the 12‑month period ending in August.

Washington’s minimum wage applies to workers in both agricultural and non-agricultural jobs, although 14‑ and 15-year-olds may be paid 85 percent of the adult minimum wage ($6.86 per hour).

Find more information on Washington’s minimum wage at Wages.LNI.wa.gov. Employers and workers also may call 360-902-5316 or 1-866-219-7321.

Tools to save time and money

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Hiring workers: Are they independent contractors or employees?

FREE Webinar:  Thursday, January 17, 2008 — 9:30 - 11:30 a.m.

  • Learn how to tell the difference between an independent contractor and an employee.
  • Hear about how to avoid common pitfalls on taxes, unemployment insurance and workers’ compensation caused by hiring a contractor who’s really an employee.

Speakers from L&I and the Internal Revenue Service will tell you about:

  • Determining whether a worker is an employee or an independent contractor.
  • Tax responsibilities and reporting requirements for each type of worker.
  • Where to find more information on the L&I and IRS web sites.
  • Know - and avoid - the consequences of misclassification.

This Webinar will use ReadyTalk, the Small Business Administration's multi-media training tool. ReadyTalk allows you to attend valuable training from the convenience of your home or office at no cost to you.  It's easy to use! 

How to Register:
Send an e-mail to SL.Northwest@irs.gov. Include your name, company name and phone number. We will send you an e-mail confirming your registration, and include the toll-free conference dial-in number and the participant access code for both the phone and web portions of the seminar. Register Today! Space is limited.

L&I workshops focus on workplace safety

Four new workshops focusing on workplace safety will be offered by L&I early next year in several cities around the state.

The free workshops, aimed primarily at employers, will be available in the next two months in Mt.Vernon, Bremerton, Vancouver and Tukwila. Workshop topics are:

Course descriptions, workshop schedules, and registration information is available at http://www.lni.wa.gov/Safety/TrainTools/Workshops/Available . Information and registration also is available by calling 1-800-574-2829.

Weekly safety messages on new L&I safety calendar

2008 Job Safety Calendar for Construction and AgricultureColorful photographs, touches of humor and thought-provoking messages reinforce the educational purpose of the 2008 Job Safety Calendar for Construction and Agriculture.

The calendar features hazards common to both industries, including trenching, excavation, machine safety and carbon monoxide poisoning. Weekly safety messages are displayed in a monthly calendar format.

Visit www.SafetyCalendar.Lni.wa.gov to purchase printed calendars or download an unbound calendar free from L&I’s web site.

Cost for one printed calendar is $6, which covers tax, shipping and handling. A discount is available for quantities of 5, 10, 25, 50 or 100. To order by phone instead of online, call 360-586-6363. If you want to purchase more than 100 calendars, please call L&I at 1-800-574-9881.

Focus On:

New Family Leave Act fact sheet explains leave benefits for pregnant women

The Washington State Family Leave Act (FLA) builds on the existing similar benefits found in the federal Family and Medical Leave Act (FMLA) by providing additional benefits for women who are pregnant. Women employees who take leave from work for pregnancy-related conditions or childbirth and who qualify for leave under the federal Family and Medical Leave Act are entitled to additional leave benefits under the Washington State Family Leave Act.

A new fact sheet explains how the state FLA, federal FMLA, and the Washington State Human Rights Commission laws are coordinated in typical circumstances.  It includes lots of questions and answers, plus useful examples. You can find the fact sheet at: www.Lni.wa.gov/WorkplaceRights/files/FamilyLeaveFAQs.pdf

Sign up for the Wage and Hour ListServ for e-mail updates
www.Lni.wa.gov/Main/Listservs/WRWageHour.asp

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