“The workers’ compensation system is important to millions of workers and employers in our state, and we work hard to make sure it’s working effectively. The proposed increase reflects the fact that the costs of replacing injured workers’ wages and covering their medical care have increased,” L&I Director Joel Sacks said.

“This relatively modest change aligns with our efforts over the years to keep rates steady and predictable, maintain an appropriate reserve to pay claims, and continue to improve our system,” he said.

The proposed increase is slightly less than what L&I expects to pay out for 2025 claims, so the agency will make up the difference from the workers’ compensation contingency reserve.

Being consistent and careful stewards of public money has allowed L&I to build a healthy contingency reserve to help with costs, instead of passing on steeper premium increases to employers and workers.

In recent years, L&I has reduced the impact on employers and workers by drawing from the contingency reserve to avoid larger increases in premiums. This move is in line with the agency’s principles of keeping rates stable. Without using the reserve, the agency would need to raise average rates nearly 5.5 percent to collect enough premiums to cover expected new claims in 2025.

Along with that, Washington has developed several strategies to help injured workers, reduce costs, and keep rate increases to a minimum.

Some examples include working to reduce caseloads for claim managers to allow them to resolve claims more quickly, along with focusing on access to medical care so that injured workers can see their providers sooner. In addition, L&I is raising financial incentives for employers to offer appropriate light-duty jobs to injured workers while they heal and return to work.

How Washington’s rates system compares with other states

Employers and employees pay into the workers’ compensation system to fund wage and disability benefits and medical coverage for work-related injuries and illnesses.

Other states charge rates as a percentage of payroll, so when employee wages go up, those states automatically collect more premiums without raising rates. Washington charges workers’ compensation premiums based on hours worked. When wages go up in Washington,

the amount employers and workers pay for coverage stays the same. That’s why Washington must raise rates to cover increases in wages and other costs.

The Washington Economic Revenue Forecast Council projects the average wage of Washington state workers to increase by 3.8 percent in 2025. This increase, added to rising medical costs and other expenses, results in higher costs for the state’s workers’ compensation system. The rate increase helps to cover those costs.

Public hearings planned

Public hearings are scheduled for Oct. 28 and 29 to take input on the rate proposal before a final decision is made. The Oct. 28 hearing is at 10 a.m. virtually and in person at L&I headquarters in Tumwater. The Oct. 29 in-person-only hearing is at 10 a.m. in Spokane.

10 a.m., Oct. 28 (hybrid meeting)

L&I Headquarters, Rooms S117, S118, S119
7273 Linderson Way SW
Tumwater, WA

OR

Join electronically: https://lni-wa-gov.zoom.us/j/4283482697?omn=81289237905  

Meeting ID: 428 348 2697

Join by phone (audio only): 253-215-8782 US (Tacoma)
Meeting ID: 428 348 2697

10 a.m., Oct. 29 (in-person only meeting)

CenterPlace Event Center
Meeting Room
2426 Discover Pl
Spokane Valley, WA

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. 30.

Final rates will be adopted on Nov. 26 and go into effect Jan. 1, 2025.

More information about the proposal is available at www.Lni.wa.gov/2025Rates.