Washington Will Increase Compensation Rates in 2027
The state agency plans to raise workers' compensation premiums by 4.9% starting in January.
Updated on Sept. 28, 2026 in Employment
Live Poll
Should employers and workers pay higher rates for state workers' compensation insurance?
The Washington State Department of Labor & Industries has proposed a 4.9% increase in workers' compensation insurance rates for 2027. This adjustment is intended to cover rising costs associated with wage replacement and medical care benefits for employees.
Why it matters
Rising wage inflation and medical costs require the adjustment to maintain the state's workers' compensation fund. By increasing premiums, the agency aims to ensure sufficient coverage while managing existing differences through the contingency reserve.
The proposed 4.9% rate hike is expected to raise the average coverage cost by $1.44 per week for each full-time employee. Currently, employers are responsible for 75% of the total premium, while workers contribute the remaining 25%.
The players
Washington State Department of Labor & Industries
This state agency manages the workers' compensation system and is responsible for setting premium rates for employers and employees.
The details
The rate increase is driven by ongoing state wage inflation and the higher cost of medical services. The Department of Labor & Industries utilizes its workers' compensation contingency reserve to balance total cost differences and stabilize funding.
Timeline
October 28, 2026: Virtual public hearing held at 10 a.m.
October 29, 2026: Virtual public hearing at 2 p.m. and deadline for public comments.
November 30, 2026: Final insurance rates are scheduled for adoption.
January 1, 2027: New workers' compensation rates officially take effect.
Macro View
This proposal reflects the state's historical practice of adjusting insurance premiums in response to labor market inflationary pressures. It mirrors past cycles where the Department of Labor & Industries recalibrated rates to ensure the solvency of the workers' compensation fund.
The average full-time worker may see a modest increase in their portion of the premium, amounting to a portion of the $1.44 weekly rise. Employers will bear the majority of the cost, which may influence payroll budgeting for the coming year.
The takeaway
Maintaining the sustainability of the state's insurance fund is a recurring requirement as medical and wage costs evolve. Businesses and employees should prepare for these adjusted payroll deductions ahead of the January implementation date.
What happens next
The public can participate in virtual hearings on October 28 and October 29, 2026, before the agency adopts final rates on November 30, 2026.
Further reading
For more information on state labor policies, visit the Employment section.
Source note: This article includes information reported by Tri-Cities Area Journal of Business.
Live Poll
Should employers and workers pay higher rates for state workers' compensation insurance?
