Workers’ compensation, also known as Industrial Insurance, is administered by the Washington State Department of Labor & Industries (L&I).  Workers’ compensation is a type of insurance that protects employers and workers in the event of a workplace injury. So, if an employee is injured on the job, workers’ compensation insurance will pay to cover expenses like:

• medical costs
• partial wage replacement due to time loss

So, let’s talk about what goes into rate setting, and how premiums are established.  Workers’ compensation insurance looks at the hazards of the industry. Jobs that are more likely to cause injuries will more than likely pay higher insurance premiums for workers’ compensation coverage.

Employers purchase workers’ compensation coverage through L&I. Then, L&I manages all claims and pays benefits out of an insurance pool called the Washington State Fund. This fund is financed by premiums paid by employers and employees, not by general revenue taxes.

Employers and employees in Washington state pay into the workers’ compensation system to help cover the costs of providing medical benefits and wage benefits to injured employees. Rates are determined based on hours worked, not wages.

L&I has proposed a 4.8% increase to workers’ compensation insurance payments for 2023. The increase would mean employers and employees would jointly pay $61 more per year for each full-time employee.

If you have workers, whether they are employees or independent contractors, you might be required to provide workers’ compensation. To check if your workers should be covered, go to Independent Contractors for more information.

Washington State does not allow private workers’ compensation coverage. You must purchase your coverage from L&I or be a certified self-insured employer. Learn more about Self-Insurance.

In 2021 and 2022, L&I helped employers and workers impacted by the pandemic by tapping its contingency reserves to avoid a larger increase in premium rates. Similarly, in order to prevent a larger rate increase, this is the approach L&I wants to take in 2023.

For more information about workers’ compensation and the proposed 2023 increase:

Contact L&I

Phone: 360-902-4817

Fax: 360-902-4988

Mailing address

Washington State Department of Labor & Industries (L&I)
Employer Services
PO Box 44140
Olympia WA 98504