Effective Jan. 1, employers and workers together will pay, on average, about a dollar a week more for each full-time position. Workers will pay about a quarter of the premium, similar to last year.

“This modest change helps us cover the higher cost of crucial wage and medical benefits for workers, while keeping rates steady and predictable,” L&I Director Joel Sacks said.

“This increase will help us ensure our workers’ compensation system is financially healthy and dependable for all workers and employers in our state,” he said.

The 3.8 percent increase is an average for all industries. The base rate for specific industries could be higher or lower depending on their recent claims history.  

Washington state requires employers and workers to 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.

Each fall, L&I determines workers’ compensation rates for the following year by looking closely at several factors, including the expected workers’ compensation benefits costs, size of the contingency reserve, wage and benefit inflation, operational costs, investment income, and other financial indicators.

Public hearings process provided opportunity for input

Approval of the proposed rates followed two public hearings held in October — a hybrid in-person and virtual meeting at the L&I headquarters in Tumwater, and an in-person meeting in Spokane. The agency also accepted written comments. Representatives from the business and labor sectors were among those who testified during the hearings.

L&I working to ease impact on business, workers

The increased premiums will bring in slightly less than what L&I expects to pay out for 2025 claims and expenses. The agency will make up the difference by tapping into the workers’ compensation contingency reserve. The reserve helps offset costs when needed and keeps rate increases steady and predictable.

L&I has worked over the years to keep rates from fluctuating significantly by maintaining a healthy contingency reserve. At the same time, the agency keeps workers’ compensation costs down by helping prevent work-related injuries and illnesses, offering services early in the claims process, assisting injured workers in healing and returning to work, and providing incentives for employers to bring back injured workers.

How Washington’s workers’ compensation system works

Most states charge rates as a percentage of payroll, so when employee wages and payrolls go up, more premiums are automatically collected. However, in Washington, employers are charged an hourly rate. When wages go up in Washington, it costs L&I more to provide workers’ compensation benefits. Rate increases are one way the state covers the increase in the cost of providing coverage.

More information about 2025 workers’ compensation rates is available at Lni.wa.gov/Rates.  

Workers’ compensation facts:

• L&I workers’ compensation insurance covers about 2.8 million workers and more than 201,000 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.