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Risk Classification & Reporting Rules

 

About classification & reporting rule updates

Why are classifications or reporting rules changed?

As industries continue to evolve and change, older methods and practices disappear and new enterprises develop. This continual renewal means some classifications may eventually:

  • No longer clearly describe the industries assigned to them.
  • Combine industries that no longer are similar to each other.
  • Have so few workers reported in them that the classification is less aligned with the insurance principles.

When this happens, rates may no longer accurately reflect the amount of hazard in the work place and the classification plan needs to be updated to ensure our rates remain fair and equitable. To see a list of upcoming and current classification and reporting rule updates, see Rule Activity.

How are classifications and reporting rules updated?

Rule changes must comply with the Administrative Procedure Act, Chapter 34.05 RCW, which normally requires us to complete 3 filings with the State Registrar's Office. For details, see Laws, Rules, and Rulemaking.

What is the workers’ compensation classification plan?

The workers' compensation classification plan is all of the classifications listed and defined in Chapter 296-17A WAC that describe business operations in Washington. Each classification has an assigned rate that is used to calculate an employer's workers' compensation premium.

What is the workers' compensation classification system?

The workers' compensation classification system is the rules in Chapter 296-17 WAC that explain how employers are to report workers and hours for calculating their workers' compensation premium.

How are businesses classified and rated?

The Washington Legislature directs the Department of Labor & Industries in RCW 51.16.035 to classify all occupations or industries by their degree of hazard, in accordance with standard insurance principles.

What are the standard insurance principles used for classifying?

WAC 296-17-31029 describes the insurance principles followed by the classification plan. The principles require our classification to follow these guidelines:

  • Administrative ease — Wherever possible, we want to classify by type of business instead of individual occupation. This reduces the recordkeeping and tracking required for paying premiums.
  • Statistical credibility — Each classification should apply to a large enough pool of workers to ensure the data used for calculating rates is reliable and the rates are stable.
  • Homogeneity — By classifying similar businesses together by type of industry, classification rates will continue to reflect the appropriate level of hazard, even if a specific industry practice changes.
  • Equity — Appropriately designed classifications will ensure that rates fairly reflect the amount of hazard in the work place.
  • Safety — When rates appropriately reflect the level of hazard for employers, industries that use safety practices will see lower rates.

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