News for Small Business - December 2009

News for Small Business - News for L&I small business customers and tips for saving time and moneyI
December 2009

2010 workers' comp rates average 7.6 percent increase

Most employers will see a workers' comp rate increase in 2010, given that overall average rates for workers' comp premiums will increase by 7.6% next year due to higher medical, time-loss and pension costs.

Employers will receive 2010 workers' comp rate notices in the mail starting late in the week of Dec. 7.

L&I Director Judy Schurke said the agency made the increase as small as possible while ensuring that the workers' comp fund meets its obligations to injured workers.

At Gov. Gregoire’s direction, Schurke convened a group of business and labor leaders to examine ways to control long-term costs to the workers’ compensation system. Workers' comp program managers also have intensified their efforts to reduce operational costs of managing the system while protecting benefits that injured workers receive.

Two of the biggest factors that influenced this rate increase are health-care inflation and wage inflation, up 8.5 percent and 3.4 percent last year, respectively. Because Washington premiums are based on hours worked, L&I must explicitly adjust rates for wage inflation. Other states assess premiums as a percentage of payroll hours and, as a result, revenue automatically goes up as wages increase, without the need for a formal rate increase.

The 7.6 percent rate increase, which will bring in an additional $117 million, is an average for all Washington employers. Average premiums will go up by about 4 cents per hour worked. Individual employers could see their rates go higher or lower than 7.6 percent, depending on their recent claims history and any changes in the frequency and cost of claims in their industry.


Workers will pay more too. Washington is the only state where workers pay a significant portion of premiums. Next year, their share will increase slightly to about 28 percent.  Employers are entitled to deduct their workers' portion of the premium from employees' paychecks.  The annual rate notice will specify the exact amount per hour that you may deduct.

Find your2010 rates
Please call your L&I account manager if you need to know your specific 2010 rates immediately. Your account manager’s phone number is on your quarterly report, or you can find them by calling L&I Employer Services at 360-902-4817.


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New workers’ comp quarterly report form launched

L&I’s new quarterly report form is cleaner and easier to use for employers who prefer to file a paper report rather than use the online filing system.

Changes make the form easier to use, thanks to help from small business owners who tested our early versions and helped us to make useful, practical improvements over the old form.

What’s different?
• The form’s organization is basically the same, but we’ve made it visually clearer and dropped the insurance lingo. For example, we changed the column heading: "Composite rate per hour/unit" to "Your Rate."
• We eliminated the yellow carbon copy with its fine-print instructions. Instead, we now enclose a step-by-step instruction sheet with a visual “map” of the form itself.  A late-fee calculator sheet is on the other side if you need it.

To save time and postage, consider joining more than 60,000 business owners who file online with L&I’s Quick File system. You can find it by clicking this link or by selecting the “File Quarterly Reports” link on the L&I home page at www.Lni.wa.gov.

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Tools to save time and money

Save money: Provide on-the-job training for an injured worker

A new on-the-job training program at L&I can help you save on workers’ comp premiums and reduce your risk when filling a job opening.

By providing on-the-job training to injured workers, you can get:
• Up to two years of training fees in return for training an injured worker.
• Savings on your workers’ comp premiums and protection from risk if the injured worker aggravates the original injury or has a new work-related injury or illness.
• The ability to evaluate a worker before taking them on permanently (an employer isn’t required to hire the worker at the end of the training).


Interested? Read more by selecting this link, or by contacting your nearest L&I consultant:
• Northwest Washington: Rick Freitas, 360-416-3050
• Southwest Washington: Sally Irish, 360-902-4837
• King County: Peggy Halstead, 206-515-2818
• Pierce County/Central Peninsula: Steve Hagoski, 253-596-3874
• Central Washington: Jack Patton, 509-886-6571
• Eastern Washington: Candace Shroll, 509-324-2593

Shared Work Program an alternative to layoffs

Employers seeking to avoid layoffs may want to consider the Washington State Employment Security Department’s Shared Work Program.


Here’s how it works: Employers can temporarily reduce the work hours of their full-time employees by up to 50 percent, while the workers collect partial unemployment benefits to replace a portion of their lost wages. This allows employees to maintain their income and benefits while employers retain skilled workers. More than 2,000 businesses and nearly 42,000 employees are currently participating in the program. To learn more, visit the Employment Security Department Web site or call 800-752-2500.

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Rules, regulations and laws update

Workers’ comp release takes effect for retainage on public workWashington State Legislative Building

L&I can now collect unpaid workers’ comp premiums from the retainage funds kept by a public agency on most prevailing wage projects.

Upon completion of a contract over $35,000, the new law requires the public agency that contracted the project to notify both L&I and the state Department of Revenue. L&I will approve release of the retainage funds when it certifies that contractors on the public works project have paid their workers’ comp premiums.


If L&I finds that a contractor has unpaid workers’ comp premiums, it can collect the debt from the public agency and the retainage fund held by that agency for that project.

L&I began to enforce its release requirement on October 1, 2009. The Department of Revenue already had a release requirement for general state business taxes.

For more information on the process, please see this prevailing wage fact sheet on the L&I Web site.


Questions? Contact 360-902-5759 or e-mail at ContractRelease@Lni.wa.gov.

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