Labor & Industries report increase in recovery of unpaid workers’ comp premiums

The Department of Labor and Industries (L&I) has reported improvements in its ability to identify and collect unpaid, construction workers’ compensation premiums, according to a statement released this month.

In fiscal year 2004, which ended on June 3, L&I collected more than $4.5 million in insurance premiums that had not been reported and paid by construction employers. That figure represents a 42 percent average increase over dollars found and collected in the prior three years, according to the department.

The recovery was part of the Tax Discovery Initiative started in 2001 as a result of complaints from contractors who found themselves competing against companies that failed to register with the department, accurately report hours worked, and pay workers’ compensation premiums owed.

The initiative also included a provision to work with employers and reduce the number of construction-related injuries. By reducing injuries and bringing more contractors into compliance with the law, the agency expects to hold down rates and spread premiums more broadly across the construction industry.

In the statement, L&I Director Paul Trause commented, “It’s a matter of fairness and maintaining the integrity of our workers’ compensation system. The high incidence of noncompliance, plus the number of injuries and the cost of claims in construction, led to premium rates that are generally higher than other industries. And we think that provided a greater incentive to cheat.”

The workers’ compensation system provides industrial insurance coverage for about 160,000 employers and 1.9 million workers. In addition to providing benefits to injured workers, the system protects employers from the cost of claims that can last a lifetime, and from tort lawsuits that could result from workplace injuries.

For more information, visit L&I online at http://www.lni.wa.gov/.

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