The Washington State Department of Labor and Industries (L&I) announced a proposed average rate increase of 4.9% in workers’-compensation rates for 2026. For construction, the average is less at 3% with some risk classes decreasing and some increasing. Unlike other states, Washington’s rates are calculated on hours worked as opposed to wages paid; so there is no “built in” rate increase as wages rise and timeloss rates increase like there is in other states. L&I advises this approach is so that employers are not penalized with significantly higher insurance charges based on the wages they pay.
Another difference from other states is that in WA employers pay about 75% of premium and workers’ pay about 25%. L&I advised the proposed rate increase would be higher (nearly 13%) due to medical and wage inflation; but it is being offset with investment earnings and the contingency reserve. L&I advises this approach helps them to maintain steady and predictable rates. As always, higher indicated rates point to areas that need improvement that we continue to advocate for through our meetings with L&I and our efforts in policy, rule, and legislation.
https://www.lni.wa.gov/news-events/article/25-24 Click here for L&I’s announcement
https://www.lni.wa.gov/insurance/_docs/Proposed2026RatesBusTypeClassCode.pdf Click here to view rates by risk class
https://www.lni.wa.gov/insurance/rates-risk-classes/rates-for-workers-compensation/ click here to view rates in Excel
These L&I base rates are then modified by employer’s individual experience within the L&I experience period which for 2026 includes hours and claims occurring between 7/1/21-6/30/24. AGC Retro participants will be receiving their individual 2026 proposed experience-modification rates (EMRs) with an offering for individualized online training for each company. If you are not in Retro and would like EMR training, please contact AGCW’s Workers-Comp Retro director, Lauren Gubbe.
With the new L&I rates, there is also a new L&I deduction for medical aid-only claims that has been increased to $4,100. This means that all medical only claims receive this deduction and if costs are at or under $4,100 there is zero impact to a company’s EMR.
Other L&I discounts applied to company’s rates:
- If a company has three continuous years without timeloss or permanent disability claims within the experience period, an automatic 10%-40% “claims free” discount is applied to the EMR.
- Apportionment of liability on occupational disease claims. If the exposure within the experience period is under 10%, the claim is not charged in the EMR. Charges not recouped via chargeable employers within the experience period are absorbed by the risk class deemed injurious within the base rates.
- A 50% discount is applied on all third-party claims until LNI recovery. If LNI recovery occurs, the actual recovery is applied if it is within the rating year.
- Relief on pension claims if the pension is deemed the result of a combination of factors and not solely the result of the industrial condition covered under a claim.
- Relief if a company has 3 or more claims due to the same accident that result in total permanent disability or death. LNI caps the total of all claims combined at the average death value which changes every year and for 2026 is $398,730.
- Preferred Worker claims are not charged provided the worker is certified and hired as a Preferred Worker at the time of the claim. Click here for more info on this important program: https://lni.wa.gov/claims/for-employers/employer-incentives/preferred-worker-program
As always, AGC continues to advocate for fair, equitable, and accurate timeloss rates, no age limits on settlements, a clear definition of what constitutes an occupational disease, and for cost-of-living increases on timeloss and pension claims to be changed from the state’s average wage to a more accurate and predictable inflation measure, such as the CPI (consumer price index).