BIAW speaks out against workers’ compensation increase

October 27, 2023

BIAW lobbyist Tom Kwieciak recently spoke out against a 4.9% increase in the state’s workers’ compensation rate proposed by Washington’s Dept. of Labor and Industries.

At a hearing Thursday, Oct. 27, in Olympia Kwieciak and lobbyists for the Association of Washington Business and Associated General Contractors warned L&I that continued increases based on the state’s average annual wage were unsustainable.

“Combined with last year’s adopted rate increase, L&I rates will have gone up over 10% over the last two years,” Kwieciak said. “More concerning is the trajectory of the “indicated” rate increase – which shows the true cost increases in the L&I system before the Department “buys down” these rate increases with funds from the contingency reserve.”

Workers’ compensation increases not sustainable

Kwieciak cautioned L&I against increasing rates using the state’s contingency reserve fund to mask the true costs.

L&I says this is the fourth year they’ve tapped the contingency reserve fund to avoid larger increases in premiums. Without the contingency reserve, it would need to raise average rates by nearly 10% to cover new claims in 2024.

“These double-digit indicated rates are not sustainable,” he said. “Without raiding the contingency reserve fund, built largely upon exceptional investment results, we would be staring at a shockingly high rate increase each year. Continually buying down rate increases with investment windfalls masks the true costs of our expensive workers’ comp system. This sets us up for a financial reckoning in the years ahead.”

Time to change the workers’ compensation formula

Kwieciak and others voiced support for basing cost-of-living increases on the Consumer Price Index (CPI) like most other states. Washington is the only state using its average wage as a basis for increases.

“We must control system costs now, before we run out of our ability to buy down rates every year,” Kwieciak said. “We would welcome the Department’s thoughts and inputs on developing a legislative proposal that protects injured workers’ buying power and at the same time more accurately reflects cost of living increases.”

Share your views

Submit your written comments:

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. 31.

More information about the proposal is available at www.Lni.wa.gov/2024Rates.