State worker’s comp rates rank low nationally

A new rate-comparison study shows that workers’ compensation rates in Washington remain among the lowest in the nation.

The 2004 “Workers’ Compensation Premium Rate Ranking” study by the Oregon Department of Consumer & Business Services shows Washington at 35th. That means 33 states and the District of Columbia had higher workers’ compensation rates in 2004 than Washington and only 16 states had lower rates.

If you remove the portion of the premium paid by workers in Washington, the state ranks 44th in terms of net cost to employers. Washington is the only state in the nation in which employees pay a portion of the premiums.

“Our rates remain in the bottom third in terms of cost compared with other states, and our benefits remain among the best in the nation,” said Paul Trause, director of the Washington Department of Labor and Industries (L&I), which runs the state’s workers’ compensation system. “I believe we continue to be a good buy for employers and good insurance for employees.”

Trause noted that the Oregon study, conducted every two years since 1986, is often cited in the insurance industry as an authoritative gauge of workers’ compensation rates nationwide.

Washington’s average State Fund premium ranking of 35th in 2004 compares with 45th two years earlier — before premium increases in 2003 and 2004.

The new Oregon study does not include a 3.7 percent rate increase
announced by L&I for 2005. Trause noted that he expects the limited premium increase in 2005 to compare well with other states and, in fact, to enhance Washington’s overall ranking.

Trause said Washington’s rates remain in the bottom one-third because of low administrative costs and because investment income is used to defray approximately one-third of the benefit costs.

Even with the workers’ share of the premium included, Washington’s ranking is better than Idaho’s at 34th, Montana’s at 8th and Alaska’s at 2nd, and close to Oregon’s at 42nd.

OTHER LABOR & INDUSTRY NEWS: Washington’s minimum wage increases to $7.35 an hour

Washington’s minimum wage increased Saturday, Jan. 1, 2005, to $7.35 an hour, up 19 cents from the 2004 minimum wage of $7.16 an hour.

The Department of Labor and Industries (L&I) recalculates the state’s minimum wage each year according to the change in the federal Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The annual inflation adjustment is required by Initiative 688, which was approved by Washington voters in 1998. The CPI-W increased 2.6 percent during the 12 months ending Aug. 31, 2004.

Washington’s minimum wage applies to workers in both agricultural and non-agricultural jobs, although 14- and 15-year-olds may be paid 85 percent of the adult minimum wage.

Washington is one of three states nationwide, along with Oregon and Florida, that have voter mandates to automatically adjust their minimum wages each year. Fourteen states have minimum wages higher than the federal minimum, which is $5.15 an hour.