AGC is pleased to announce good news with regard to both workers compensation and unemployment insurance.
Today Governor Gregoire announced there will be no overall increase in workers’ compensation insurance premiums next year (however construction firms will see a smaller-than-proposed increase depending on a firms risk classification). She also announced significant reductions in unemployment insurance taxes.
With regard to workers comp AGC applauds the move as it vigorously protested the originally-suggested increase of nine percent. When the Department then lowered the proposed average increase to 2.5 percent AGC and many of its member companies held firm with the call for no increase in testimony delivered at hearings around the state.
“At public hearings this fall business owners told us they are struggling to keep doors open and workers employed and that they can’t afford even a small increase in rates in this economy. Their feedback and the latest positive trends influenced this decision” said Labor and Industries Director Judy Schurke.
Schurke noted that the AGC-supported workers’ comp reforms passed during the last legislative session will save $150 million in workers’ comp premiums in 2012. This is part of the $1.1 billion in reform savings over four years.
“AGC thanks the Department for listening to the concerns of contractors and keeping overall industrial insurance rates at current levels” said AGC of Washington President Pat McGarry. “Construction employment has decreased 35 percent over the last few years. Holding the line on workers’ comp rates will help get the construction industry back on track allowing contractors to save jobs and assuring that workers won’t see even larger paycheck deductions. This will have positive ripple effects throughout the economy. This type of responsiveness from government is helpful.”
While there will not be an overall rate increase most construction firms because they are among the higher rate classifications will see a small increase (but much smaller than originally proposed). The average increase for construction categories is three percent and ranges from a 14 percent increase for wallboard installation to a four percent decrease for construction estimators.
In addition the Governor announced significant reduction in unemployment insurance taxes for 2012. The average rate reduction would be 13 percent for about $207 million in savings overall with a smaller reduction for most construction firms. About 88 percent of businesses will pay less than they do now.
The 13 percent average drop translates into a decrease in rates from 2.45 percent in 2011 to 2. 12 percent in 2012. Class 1 (lowest rate class) rates will decrease 71 percent from 0.49 percent in 2011 to 0.14 percent next year.
Class 40 (highest rate class which includes many construction firms) will decline from 6 percent this year to 5.82 percent in 2012.
All in all its been a good day for the construction industry said AGCs Government Affairs Director Rick Slunaker. Thanks to all the AGC members that keep the pressure on policymakers throughout the year and help make the case that whats good for construction is good for the broader economy.
AGC will provide members with more detail about both of these matters as it becomes available.