The amount employers pay for workers' compensation insurance in Washington would drop an average of 2.5 percent next year, under a proposal today from the state Department of Labor & Industries.

The proposed decrease would result in Washington employers, as a group, paying $67 million less in premiums. The lower rate would mean they would pay an average of about $34 less a year per employee for workers’ compensation coverage.

L&I attributes the proposed decrease to several factors, including employers and workers focusing on safety, and L&I initiatives that are helping injured workers recover sooner, thereby reducing workers’ compensation costs. Small rate increases in recent years and the improved economy have also helped build reserves, allowing for the proposed rate decrease.

Employers and workers pay into the workers’ compensation system to help cover the cost of providing wage and disability benefits, as well as medical treatment of injuries and illnesses. 

Each fall, L&I determines the proposed rate for the following year by taking a close look at expected workers’ compensation payouts, the size of the contingency reserve, wage inflation and other financial indicators. L&I seeks to keep premium rates steady and predictable and avoid significant swings that make it difficult for employers to plan.

In the last five years, the average annual workers’ compensation rate increase has been under 1 percent. If adopted, this will be the first decline in the hourly rate since 2007.