Washington’s Department of Labor & Industries wants a 4.9 percent average increase in workers’ compensation rates for 2027. Officials describe it as about a $1.44 a week per full-time worker. Employers would still pay roughly three-quarters of the premium. The agency will use one-time contingency reserve dollars to make up any shortfall so the full cost of staff wages and medical care is not passed through at once.
That is the usual pitch from government agencies. A small number, a cushion, and a reminder that injured workers need care. Workers should be protected. The problem is the structure. For most employers, L&I is the only legal option. Washington is one of just four states that bar private insurers from selling workers’ compensation. A handful of large firms may self-insure under L&I rules. Everyone else buys from the monopoly.
Because premiums are charged by the hour, not as a share of payroll, rising wages do not automatically fund the system. Rates must be raised. With no private competitors, employers cannot shop for better claims service, faster return-to-work help, or a lower price. Each “modest” increase stacks on top of other taxes and mandates.
The fix is not another rate hike. Open the market. Keep strong benefit standards and solvency rules, but let licensed private carriers compete with the state fund. Forty-six states already do this. Competition would pressure costs, reward safer workplaces, and give injured workers better service.
Lawmakers should stop treating a monopoly surcharge as inevitable and give businesses a real choice.
