L&I proposes 4.8 percent increase in workers' comp rates for 2023
TUMWATER − The state Department of Labor & Industries (L&I) is proposing a 4.8 percent increase in the average price employers and workers pay for workers’ compensation insurance next year. If adopted, the increase would mean employers and workers would jointly pay an additional $61 a year, on average, for each full-time employee within a business.
"Even with the increase, the average hourly rate businesses will pay will be about the same as what they were paying in 2016," L&I Director Joel Sacks said. "After keeping rates steady to help businesses that were struggling during the pandemic, we're now proposing a modest rate increase that's in line with our goal of stable and predictable rates for businesses to ensure the long-term health of the workers' compensation fund."
Employers and workers pay into the workers' compensation system to help cover the cost of providing wage and disability benefits for injured workers, as well as medical treatment of workplace injuries and illnesses.
Workers will continue to pay on average about a quarter of the premium, a similar percentage to that paid in 2022.
General wage inflation and increasing medical costs all make it more expensive to provide this workplace safety net. As workers' wages go up, the cost of insuring them goes up as well, since much of the benefits directly paid to workers are tied to how much they are getting paid.
Contingency reserves cushion rate increase
In 2021 and 2022, L&I helped employers and workers struggling from the pandemic by tapping its contingency reserves to avoid a larger increase in premium rates. L&I wants to take a similar approach to prevent a larger rate increase for 2023.
Under the current proposal, L&I will use contingency reserves to cover any gap between premiums and costs to keep rates steady and avoid a larger increase.
How Washington's rates system compares with other states
In most states, rates are charged as a percentage of payroll, so when employee wages go up, more premiums are collected. In Washington, rates are charged as an amount per hours worked. When wages go up, the rate paid stays the same.
Public hearings planned
Public hearings are scheduled for 10 a.m. on Oct. 26 and Oct. 27 to take input on the rate proposal before a final decision is made. To support social distancing, the public hearings will be held virtually. Final rates will be adopted on Nov. 30 and go into effect Jan. 1, 2023.
2023 rates hearings
10 a.m., Oct. 26 and Oct. 27
Join Zoom Meeting at:
Meeting ID: 428 348 2697
Joining by phone:
+12532158782 US (Tacoma)
Meeting ID: 428 348 2697
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. 28.
More information about the proposal is available at Lni.wa.gov/2023Rates.
Workers' comp facts:
- L&I workers' compensation insurance covers about 2.6 million workers and about 187,000 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.