Washington Workers' Compensation Insurance

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Washington workers’ compensation law

Who needs workers’ comp insurance in Washington?

Workers’ compensation insurance is required for every employee in Washington, including part-time workers. This is a monopolistic state, which means coverage must be purchased through the state fund.

Workers’ compensation benefits can cover medical and hospital expenses for an employee who is injured at work. It can also cover partial wage replacement if the worker is no longer able to work to full capacity because of the injury or illness.

Workers’ compensation insurance in Washington state can include coverage for:

  • Prescriptions related to the injury or illness
  • Some travel for medical procedures or appointments
  • Reimbursement for lost or damaged property
  • Permanent partial disability and permanent total disability
  • Job retraining and assistance finding work after an injury

 

Is workers’ compensation mandatory for part-time employees in Washington?

Workers’ compensation is mandatory in Washington for both full- and part-time employees.

However, there are circumstances in which a worker would be exempt from the Washington state workers’ compensation requirements:

  • Domestic workers, when there is only one per home, and the employee doesn’t work more than 40 hours per week
  • Gardening, maintenance, or repair workers at private homes
  • Musicians and entertainers
  • A child under 18 who is employed by a parent for farm work
  • Someone hired by the business to run a personal errand or perform a task that benefits an individual, but not the business
  • A person who works in exchange for aid from a charitable or religious organization

 

Do you need workers’ compensation insurance in Washington if you are self-employed?

A sole proprietor usually does not need workers’ compensation. The business owner, who could be a member of an LLC, corporate officer, or a partner in a partnership, would not be required to carry this insurance. However, there are options available for an owner or sole proprietor who would like to elect coverage.

 

What are the penalties for not having workers’ comp insurance in Washington?

If a business doesn’t file a quarterly report or fails to pay its premium, the minimum penalty is $10. If you fail to submit a report, you will automatically be assessed the $10 penalty, even if you have no hours to report for that quarter.

When there is a premium owed, the state will charge interest at 1 percent per month.

If a premium payment is delinquent, penalties are assessed as follows:

1 month overdue: 5 percent penalty + 1 percent interest
2 months overdue: Additional 5 percent penalty + 1 percent interest
3 months overdue: Additional 10 percent penalty + 1 percent interest
4+ months overdue: Additional 1 percent interest on premiums for each month

 

What is the average cost of workers’ compensation insurance in Washington?

The average cost of workers’ compensation insurance in Washington state is $1.70 per $100 of payroll.

Washington is one of four monopolistic states, which also include Ohio, Wyoming, and North Dakota. A monopolistic state is one where you can only purchase workers’ compensation insurance from a state fund, and not through a private insurer. In Washington state, workers’ comp is administered through the Washington State Department of Labor & Industries (L&I).

Each business must have a business license and an account with L&I to purchase workers’ comp insurance through the fund. L&I will make classifications based on its own system, which determines coverage rates.

If a business or employer has $25 million or more in assets and an accident-prevention program, it might be permitted to get self-insurance.

Small businesses can still purchase other insurance policies through private insurers, including common coverages such as general liability insurance, professional liability insurance (errors and omissions), cyber liability insurance, and other policies.

 

Workers’ compensation death benefits in Washington

An eligible survivor can receive a one-time benefit plus a monthly survivor’s pension if a family member dies as a result of a job-related accident or illness.

The spouse of the deceased worker is automatically eligible for benefits. The worker’s children are eligible if they are:

  • Under 18 years old
  • Under 23 years old and a full-time student
  • Dependent on the deceased worker’s earnings because of a physical, mental, or sensory disability

If there are no surviving children and no spouse, dependents could include parents, stepparents, grandparents, stepchildren, siblings, nieces, and nephews, if they relied on the worker’s earnings.

The survivors can receive a one-time payment of the average state monthly wage of $4,913 along with a monthly pension that’s based on the worker’s average wage at a maximum of $5,895.70.

Workers’ compensation insurance in Washington state also covers funeral benefits up to $9,826 (or twice the average monthly wage).

 

Workers’ comp settlements in Washington

Washington state is unique when it comes to workers’ comp settlements. It’s the only state where the worker and the employer each pay half of the medical insurance premiums. In every other state, the employer pays for all of the workers’ compensation insurance cost.

Most workers’ comp claims in Washington become a structured settlement, which means the injured worker receives periodic payments in installments over time.

Acceptance of a structured settlement would prevent the worker from claiming future benefits for wage loss and permanent disability, but it would not prevent claims for future medical treatment. If a new injury or illness related to the original claim is diagnosed or discovered later, the claim could be reopened.

 

Workers’ comp statute of limitations in Washington

In Washington state, the workers’ compensation statute of limitations is one year from the date of injury. If the worker has an occupational disease, the statute of limitations is two years from the date it was discovered.

 

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Workers' compensation insurance: Further reading

See workers' comp laws where you live