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October 16, 1997

Employers find 5 percent discount lacks incentive
Participation in drug-free workplace program lower than expected

TUMWATER - Legislation designed to encourage drug-free workplaces in Washington has resulted in lower-than-expected participation, according to a study by the state departments of Labor & Industries and Social and Health Services.

The program the state Legislature approved in 1996 allows qualified employers a 5 percent discount on workers' compensation premiums if they enact policies for drug-free workplaces. The Department of Social and Health Services (DSHS) certifies employers for the program. Labor & Industries administers the discount because it is the agency that manages the workers' compensation system in Washington.

Labor & Industries to date has sent 6,000 applications to interested employers. But only 450 submitted applications to DSHS for certification. And as of Oct. 1, 1997, 380 employers were certified and enrolled in the program. Labor & Industries estimated that it could handle up to 1,500 accounts.

Many employers who decided against enrolling cited the 5 percent discount as being too small a financial incentive to participate in the program, according to the report. Washington is one of eight states that allow some form of discount on workers' compensation premiums for employers with drug-free workplace policies.

Employees covered by the enrolled employers represent 1.5 percent of workers in the workers' compensation system in Washington, often referred to as the State Fund.

About 157,000 employers and 1.3 million workers in Washington receive coverage through the State Fund. And 72 percent of all State Fund employers pay less than $5,000 in annual premiums for workers' compensation coverage.

Following are some of the characteristics of the 380 employers enrolled in the drug-free workplace program:

  • The 380 firms enrolled employ 19,900 full-time employees.
  • 84 percent of the enrolled employers have less than 100 employees.
  • 62 percent of the enrolled employers have better-than-average workplace safety and health records.
  • 73 percent of enrolled employers are in four industry classifications - construction, manufacturing, forest products (including logging) and transportation.
  • 54 percent of enrolled employers are in the Seattle-Tacoma-Everett area.
  • 31 percent of all worker injury claims for enrolled employers are the result of sprains and strains suffered on the job.
  • Men filed 87 percent of worker injury claims from enrolled employers.
  • >81 percent of all workers injured while working for enrolled employers in 1996 were age 44 or younger.
To enroll in the program, employers must pay to DSHS a $25 to $50 certification fee, based on the number of employees. There also is an annual re-certification fee of $25 or $50.

The discount remains in effect as long as the employer is certified, but there is a three-year limit.

The discount program will expire Dec. 31, 2000.

For copies of the Drug-free Workplace Legislative Report, contact:

Michele Payne
Department of Labor & Industries
PO Box 44160
Olympia, WA 98504-4160
Telephone: 360-902-5598
It is also available on the Internet on the L&I web page at: www.lni.wa.gov.

For information about enrolling in the Drug-free Workplace Program, contact:

Henry Govert
PO Box 45330
DSHS
Olympia, WA 98504-5330
Telephone: 360-438-8092

The legislation that authorizes the discount is Second Substitute Senate Bill 5516. The law can be found in the Revised Code of Washington (RCW) 49.82.

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