TUESDAY, SEPTEMBER 22, 2009
L&I proposes 7.6% workers' comp rate increase
WSLC vows to oppose efforts to cut injured workers' benefits in model system

With the Washington State Department of Labor and Industries' announcement of a proposed 7.6% workers' compensation premium increase in 2010, the Washington State Labor Council vowed to aggressively oppose attempts by business lobbying groups to cut injured workers' benefits in a system it called "one of the best in the country."

The proposed 7.6% increase was significantly less than the 15-20% increase that L&I warned in June could be necessary next year. Business and labor efforts to ensure system solvency and stabilize rates have helped Washington's State Fund system withstand the recession's negative impact on investments and premium revenue.

WSLC President Rick Bender released the following statement Monday afternoon:

"There is never good time to increase premiums, but even with this proposed rate increase, national reports indicate Washington is still among the least expensive states for workers' compensation insurance. Our state’s workers' compensation system is one of the best in the country and we are committed to keeping it that way. Over the past several years business and labor have worked together with the Department of Labor and Industries to ensure the system’s financial solvency and to stabilize rates. Unfortunately, when Wall Street greed and manipulation wiped out gains in the stock market, our system needed help.

"We are the only state in the nation where both employers and employees share the cost of worker comp benefits, so the increase affects both parties. But at the Washington State Labor Council we believe it is imperative to provide good benefits to workers who are hurt or injured on the job -- cutting that lifeline for an injured worker's family should never be an option.

"The business community will try to use this proposed rate increase as a battle cry to lower employers' costs by cutting benefits. That's not reform, that's punishing the victims. The surest way for employers to bring down workers' compensation costs is to reduce workplace accidents by improving safety and training for employees.”

The Department of L&I announced Monday that the premium increase is needed because the recession had taken its toll -- an estimated $1 billion hit -- with "reduced investment returns, fewer premiums because of reduced hours worked, and fewer jobs for injured workers to return to." L&I also notes that 8.5% health-care inflation and 3.4% wage inflation were also factors.

The Oregon Department of Consumer and Business Services conducts a biannual state-by-state study of workers' compensation premiums that is widely cited not only among public policy experts and state labor agencies across the nation, but also by private industrial insurance professionals. The latest edition, released in October 2008, found that Washington state had the 38th highest overall premiums in the nation.

But the news is even better for our state's employers because Washington is the only state in the nation where workers pay a portion of the premiums -- just more than 25% of the costs. Factoring that in, which Oregon's study does not, Washington ranks 5th lowest in the nation in terms of costs for employers.

With the proposed 7.6% rate increase, even if every other state in the nation is able to freeze its premiums in 2010, Washington will STILL have the 5th lowest employer costs in the United States.

Immediately after Monday's announcement of L&I's proposed rate increase, the Association of Washington Business issued a statement calling for the state to "reform" the system by cutting injured workers' benefits. Instead of acknowledging Washington's comparative advantage over other states in terms of employer costs, the state's largest business lobbying group focuses on the system's comparatively high benefits. The AWB says it intends to pursue various benefit cuts in the 2010 legislative session.

The WSLC will aggressively oppose such efforts. 

Any proposed changes to system must be made with the welfare of the injured workers and their families in mind. Simply cutting benefits for injured workers is not "reform." It would pour salt on the wounds of families who, at the worst possible time economically, have lost their source of income due to workplace injury.

Consideration should be made to ensure our system's costs stay competitive with other states. But it is absurd to make our goal to cut benefits so they are more in line with other states. Washington must not engage in a race to the bottom where injured workers and their families are thrown into poverty with no recourse. To engage in this benefit-cutting race, especially when employers in our state already have among the lowest workers' compensation costs in the country, is immoral and unacceptable.

L&I will conduct six public meetings throughout the state to give citizens the opportunity to weigh in on the proposed rate increase before announcing the final 2010 rates in late November. Here is the hearing schedule:

• Tukwila: Oct. 27, 1 p.m., L&I Office, 12806 Gateway Dr.

• Tumwater: Oct. 28, 10 a.m., L&I Headquarters, 7273 Linderson Way S.W.

• Vancouver: Oct. 28, 10 a.m., Red Lion Inn at the Quay, 100 Columbia St.

• Bellingham: Oct. 29, 1 p.m., Bellingham Quality Inn, 100 E. Kellogg Road

• Spokane: Oct. 30, 9 a.m., Spokane Airport Ramada, 8909 W. Airport Dr.

• Richland: Oct. 30, 2 p.m., Richland Hampton Inn, 486 Bradley Blvd.

Written comments, accepted through Nov. 7, may be e-mailed to Ronald Moore, Employer Services Program Manager, or mailed to him at the Department of Labor & Industries, P.O. Box 44140, Olympia, WA 98504-4140. Faxed comments should go to 360-902-4729.

^{Copyright © 2009 --  Washington State Labor Council, AFL-CIO}