Workers’ compensation premiums will increase 0.7 percent as originally proposed, despite employer concerns

The Department of Labor and Industries has announced the workers’ compensation premium increase for 2017. 

The average premium for workers’ compensation coverage in Washington will go up less than 1 percent in 2017. Today, the state Department of Labor & Industries (L&I) announced the rate will rise by an average of 0.7 percent next year.

The 2017 increase will cost employers on average about $10 more a year per employee. Most workers will not see an increase in what they pay.

While that may sound like a win, as we wrote in October, the proposed 0.7 percent increase drew criticism from business groups. The Association of Washington Business issued a press release at the time, saying, 

“Once again, the Department of Labor and Industries has elected to impose a tax increase on Washington employers that it does not need to impose,” said AWB President Kris Johnson. “The department’s proposed 0.7 percent average rate increase may seem like a small number, but some industries will see dramatically higher rate increases.

“Furthermore, the cumulative impact of this proposed tax increase, which follows several years of unnecessary workers’ comp rate increases, represents a significant cost to all Washington employers, making it harder for them to compete with other states. In fact, officials could have reduced rates an average 2.3 percent and still broken even, meaning this proposal is 3 percent higher than was necessary.”

The department clearly rejected that line of thinking. Washington has consistently had the highest workers’ compensation benefits costs in the nation. In our foundation report we identify ways to control costs and improve outcomes for workers, at the same time acknowledging that lawmakers have made some progress in recent years. 

As Kris Johnson’s comments point out, cumulative costs matter.