Washington Proposes 4.8% Workers’ Comp Increase for 2023

The Washington Department of Labor & Industries is proposing a 4.8% increase in the average price employers and workers pay for workers’ compensation insurance in 2023.

Employers and workers would jointly pay an additional $61 a year on average for each full-time employee within a business if the increase is adopted.

Workers will continue to pay on average about a quarter of the premium, a similar percentage to that paid in 2022.

General wage inflation and increasing medical costs all make it more expensive to provide this workplace safety net. As workers’ wages go up, the cost of insuring them goes up as well, since much of the benefits directly paid to workers are tied to how much they are getting paid.

In 2021 and 2022, L&I helped employers and workers struggling from the pandemic by tapping its contingency reserves to avoid a larger increase in premium rates. L&I plans to take a similar approach to prevent a larger rate increase for 2023.

Under the current proposal, L&I will use contingency reserves to cover any gap between premiums and costs to keep rates steady and avoid a larger increase.

In most states, rates are charged as a percentage of payroll, so when employee wages go up, more premiums are collected. In Washington, rates are charged as an amount per hours worked. When wages go up, the rate paid stays the same.

Public hearings are scheduled for 10 a.m. on Oct. 26 and Oct. 27 to take input on the rate proposal before a final decision is made. To support social distancing, the public hearings will be held virtually. Final rates will be adopted on Nov. 30 and go into effect Jan. 1, 2023.