Reforms Keep Wash. Workers Comp. Contributions Low

Reforms allowed Washington to keep its rate increase for worker compensation contributions at a five-year low.
by | September 22, 2011
 

Following substantial reforms passed by the legislature this year, Washington's Department of Labor and Industries announced this week it will propose the lowest rate increase in five years for employee's and employer's contribution to the state's workers compensation fund.

The state has struggled throughout the recession to keep those rates low, seeing lower rates as necessary to an economic recovery, the department explained in a press release. But over the last three years, the department used $332 million from the state's general reserve funds to keep rates low, which has reduced the state's reserves to a level that is considered "critically low by industry standards," according to the department.

The reforms passed by the state legislature -- which included a "Stay at Work" program, a freeze on cost-of-living increases and an annual independent audit of the system -- are expected to save $1.1 billion over the next four years, which allowed the department to minimize the rate increase this year, the department's release said.

Otherwise, a 10 to 14 percent increase might have been necessary to keep the system solvent, the department's director, Judy Schurke, said in a statement.

"We recognize the impact of painfully slow economic growth, and this proposal balances that with the needs of the workers' comp system," Schurke said. "The reforms passed this year had the effect they were designed to -- now and into the future."

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