For the first time in two decades, Washington workers’ compensation rates have dropped or stayed steady for four years in a row. The state Department of Labor & Industries on Monday announced there will be no increase for the average premium rate in 2021.
“We’ve managed the workers’ compensation system closely, improving services, and reducing disability. That’s why we have the funds for existing claims and contingency reserves to help during tough times, like today,” said L&I Director Joel Sacks. “Because we know how tough the pandemic has been on businesses and workers, we’re keeping rates steady in 2021 even though our projections for next year’s claims indicate rate increases are needed.”
While L&I has made small reductions to rates in recent years during better times, the agency did not approve large cuts to prepare for a future downturn like we’re in now. Last year, there was a 0.8% decrease in the average amount employers paid for the coverage. L&I cut rates by 5% in 2019 and 2.5% in 2018.
Public hearings for the proposed 2021 rates were held via Zoom in October. A small number of people testified and submitted written comments during the rules process.
While there won’t be an overall rate change for 2021, individual employers may see their rates go up or down, depending on their recent claims history and changes in the frequency and cost of claims in their industry risk classes.
As part of the 2021 rates process, L&I considered creating new risk classes, which are used to help determine workers’ compensation rates.
One proposal involved operations known as fulfillment centers, which include businesses that sell products online and provide third-party sellers with an automated platform to fill customers’ orders. Currently, these facilities are grouped in with warehouses for determining their workers’ comp rates.
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