Employers’ Guide to
Workers’ Compensation Insurance
in Washington State
Review your insurance coverage and reporting requirements.
Take steps to prevent injuries and control costs.
The information in this publication is current as of the publication date.
Every attempt is made to keep the information up to date. Changes that
occur periodically as a result of new legislation, administrative rule changes
or court hearings will be included in subsequent printings.
Note: We use the following terms interchangeably in this publication:
Industrial insurance and workers’ compensation.
Employee and worker.
Department of Labor & Industries, Labor & Industries, and L&I.
Note: Washington State law requires registered domestic partners to be treated
the same as married spouses under state law. References in this publication to
spouse, marriage, marriage certicate, divorce, divorce decree and other terms
related to legal marriage also apply to registered domestic partnerships.
Table of Contents
Chapter 1: What Is Workers’ Compensation Insurance?
.......1
Chapter 2: Coverage and Exclusions.......................2
Mandatory Coverage.............................................2
Excluded Employment ............................................2
Optional (Elective) Coverage ......................................3
Insuring Minors..................................................3
Out-of-State Workers ............................................4
Independent Contractors .........................................4
Trucking ........................................................5
Professional and Semi-Professional Athletic Teams.................5
Self-Insured Businesses..........................................5
Chapter 3: Opening an Account ...........................6
Employer Classifications .........................................6
Premium Rates ..................................................6
Payroll Deduction ................................................7
Experience Rating ...............................................7
Chapter 4: Reporting and Recordkeeping ..................9
How to File Quarterly Reports.....................................9
Determining Reportable Worker Hours/Units......................10
Splitting Worker Hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
If You Fail to File Your Reports or Pay Premiums ................... 11
Recordkeeping .................................................12
Accident Records ...............................................13
Audits .........................................................13
Posting Requirements...........................................13
Chapter 5: Employee Benefits............................14
Types of Benefits ...............................................14
Gross Income...................................................16
Chapter 6: If an Injury or Illness Occurs...................17
Filing an Accident Report ........................................17
Confidentiality: It’s the Law ......................................18
Table of Contents
Get Involved in Your Claims ......................................19
Available Resources for Employers ...............................20
Know Your Protest and Appeal Rights ............................20
Discrimination Against Workers..................................20
Financial Protections for Employers ..............................20
Chapter 7: Prevent Injuries and Control Your Costs ........23
Focus on Safety ................................................23
Manage Claims .................................................24
Consider Retrospective Rating ...................................24
Chapter 8: If You Disagree with an L&I Decision...........25
Protest/Reconsideration ........................................25
Appeal .........................................................25
Appendix A ............................................26
Definition of an Employer ........................................26
Definition of a Worker ...........................................26
Appendix B ............................................27
Out-of-State Workers ...........................................27
Appendix C ............................................29
Responsibility for Independent Contractors .......................29
Liability for Unpaid Workers’ Compensation Premiums . . . . . . . . . . . . . 30
Appendix D ............................................31
Certificate of Coverage..........................................31
Workers’ Compensation Rate Notice .............................32
Workers’ Compensation Employer’s Quarterly Report ..............33
Sign up for My L&I to get online access to your
account and claims information ...............................34
L&I Web Addresses.............................................35
L&I Service Locations...........................................35
Toll-free Numbers...............................................35
1
Chapter 1:
What Is Workers’
Compensation Insurance?
Workers’ compensation (industrial insurance)
coverage protects both workers and employers
from the nancial impact of a work-related injury
or occupational disease.
It pays for an injured worker’s approved medical,
hospital and related services that are essential to
their treatment and recovery. An injured worker
who is temporarily unable to work also receives
partial wage replacement payments.
As an employer or prospective employer, you must
provide workers’ compensation insurance coverage
for any worker who doesn’t meet the rules for
exemption. Coverage is mandatory. In return, your
worker ordinarily cannot sue you for damages
when a work-related injury or illness occurs.
Employers purchase coverage through the
Department of Labor & Industries (L&I).
L&I manages all claims and pays benets out of an
insurance pool called the Washington State Fund.
The fund is nanced by premiums paid by employers
and employees, not by general revenue taxes.
However, employers may qualify for
self-insurance if they demonstrate they have
sufcient nancial stability, an effective
accident prevention program, and an effective
administrative organization for a workers’
compensation program. (See Page 5.)
This publication is a general guide that explains
Washington State’s workers’ compensation
program. It is not a legal interpretation of
workers’ compensation law, but it will help you
understand employers’ basic legal requirements
and suggest ways to minimize your workers’
compensation insurance costs.
2
Chapter 2:
Coverage and Exclusions
Mandatory Coverage
Generally employers must provide workers’
compensation (industrial insurance) coverage for
their employees and other eligible workers.
There are two ways to provide this coverage
depending on the nancial resources of
your business.
State fund: Most businesses participate in
the state’s workers’ compensation program.
Self insurance: Companies with at
least $25 million in assets, and some
governmental entities, may qualify.
The Department of Labor & Industries,
Insurance Services Division, manages the
Washington State Fund. This fund derives its
income solely from premiums paid by you and
your employees. The fund receives no money
from general tax revenues.
The denitions of “employer” and “worker” used
for workers’ compensation purposes are located
in Appendix A. All Washington workers must be
covered through the State Fund or by a certied
self-insured employer, unless they are subject to
an exclusion listed in the next section.
Excluded Employment
The information provided in this section is a
summary. For a complete description of excluded
employment, please see RCW 51.12.020.
Workers not covered
You are not required to provide coverage for the
following workers:
1. A domestic worker in a private home. However,
if two or more are employed regularly for 40 or
more hours a week, all must be covered.
2. A person employed to do gardening, maintenance,
repair or similar work at an employer’s private
home. This does not include an individual hired
to do home improvements or upgrades.
3. A person who is not a regular employee of the
trade, business or profession of the employer
and is not working at the employer’s private
home. This exclusion refers to a person hired
to perform a personal errand or chore that
benets the employer as an individual, but not
the business. For example, a professional golfer
would need to provide coverage for a golf
caddy, but a recreational golfer would not.
4. A person working only in return for aid or
sustenance from a religious or charitable
organization.
5. A child under age 18 employed by a parent in
agricultural activities on the family farm.
6. Jockeys participating in or preparing horses for
race meets licensed by the WA Horse Racing
Commission.
7. Musicians or entertainers, if:
Your primary business is other than
entertainment.
They don’t also work for your
primary business.
They don’t perform on a regular and
ongoing basis for you.
Chapter 2
3
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Example: A bar owner is not required
to report a musician as long as the
musician doesn’t also work in the bar
when not performing and the contract
is not regular and continuous (such as a
long-term piano player at a piano bar).
8. Newspaper carriers or vendors who distribute
newspapers to residences, businesses, or on
the street, and freelance journalists or photo
journalists who are paid solely by piece work
and use their own equipment.
9. An insurance producer.
10. A cosmetologist, beautician or barber who
rents or leases booth space.
11. A driver providing commercial transportation
services as dened in RCW 48.177.005.
Business owners, partners, corporate
officers and members/managers
Individuals who own and control any type of
business are generally excluded from mandatory
workers’ compensation coverage. However, there
are limits on both the number of owners who
can be excluded and the level of control required
for exclusion. There are also special provisions
for some family-run businesses. If you own and
operate a business and have questions about your
excluded status, please contact the Employer
Services Help Line at 360-902-4817.
Exclusion on family farms
A child under age 18 employed by a parent in
agricultural work on the family farm is excluded
from mandatory coverage. After age 18, the parent
must report and pay premiums for the child
unless they meet the requirements and submit
an Application for Exclusion/Inclusion Mandatory
Coverage (Family Farm) (F213-113-000). After age 21,
children working on their parents’ family farms
are under mandatory coverage.
Optional (Elective) Coverage
Workers’ compensation coverage is available
for some individuals excluded from mandatory
coverage. This coverage is referred to as optional
or “elective” coverage.
To apply for “elective” coverage, you must
complete and return an Application for Elective
Coverage. For more information, contact the
Employer Services Help Line at 360-902-4817.
Student volunteers, unpaid students and
unpaid student interns
Businesses may elect optional “elective” coverage
for their student volunteers in public and private
K–12 and intuitions of higher education who are
working without wages as part of a school program.
Businesses may elect optional “elective” coverage
for unpaid students and unpaid student interns
in a work-based school-sponsored program. For
a complete description of student volunteers,
unpaid students, and reporting options, please
see RCW 51.12.170 and WAC 296-17-935.
Note: Individuals who elect optional coverage are
considered to be an employee of the business/
company for purposes of workplace safety
and heath regulations under the Washington
Industrial Safety and Health Act (WISHA).
Insuring Minors
Workers’ compensation laws protect virtually
all employees, including minors (workers under
18 years of age). Even minors working for a parent
in the family business are covered. The only
exception is a minor working on a family farm.
(See “Excluded Employment”on Page 2.)
Before you hire a minor employee, you must
obtain a minor work permit endorsement on your
Business License. You will also need to have a
signed Parent/School Authorization form and/or
Parent Authorization for summer work and proof
of the minor’s age. Parent authorization is still
required during non-school weeks.
Chapter 2
4
In addition to the administrative requirements for
hiring minors, you are responsible for knowing
the limits on their hours of work and which
specic work activities are prohibited. You can be
assessed civil penalties or be subject to criminal
penalties for violating child labor laws.
For more information:
On the web at Lni.wa.gov/TeenWorkers.
Telephone: 360-902-5315 or 1-866-219-7321.
Email: TeenSafety@Lni.wa.gov.
Out-of-State Workers
If you send Washington workers to work
temporarily in another state or you bring workers
from another state to work in Washington, please
see Appendix B for more detailed information.
Appendix B denes when a worker is considered
a Washington worker or an out-of-state worker,
and it explains reciprocal agreements and lists
the states with which Washington has reciprocal
agreements for workers’ compensation coverage.
Paying premiums for out-of-state
Washington workers
Premiums must be paid to L&I when you have
Washington workers in another state or province
for fewer than 31 days in a calendar year, even
if you are also required to pay premiums to the
other state or province.
WAC 296-17-35203(8) allows for supplemental
out-of-state reporting in certain circumstances. If
your Washington workers are in another state for
more than 30 days, then you may apply for out-of-
state reporting if:
There is no reciprocal agreement directing
you to report these workers to Washington.
You can prove you’re paying premiums for
these workers to an out-of-state workers’
compensation insurer.
Out-of-state reporting allows you to report
out-of-state hours and wages without paying
premiums to L&I.
If you are bringing out-of-state workers
temporarily into Washington, you do not need to
pay premiums to L&I if:
There is a reciprocal agreement that assigns
coverage to the worker’s home state.
There is no reciprocal agreement, but you
insure the worker for workers’ compensation
in their home state and the temporary work
performed in Washington doesn’t require
registration as a contractor or an electrical
license to perform.
Note: The home state insurer must be willing to
cover all claim costs incurred in Washington. If
not, you may be subject to premium assessment,
penalties for not reporting, interest on unpaid
premiums and a penalty of between 50% and 100%
of the cost of a claim. Even if the homestate insurer
provides coverage, you could be held responsible
for any benets not offset by the out-of-state
insurer and paid by L&I. You can always choose
to cover your out-of-state workers in Washington
while working temporarily in Washington.
Employers bringing out-of-state workers temporarily
into Washington, who are required to or choose
to pay premiums in Washington, can apply for
coverage at dor.wa.gov. On the business license
application indicate you are hiring employees.
For more information, please see
Lni.wa.gov/OutOfState.
Or call 360-902-4817.
Independent Contractors
Generally, you are not required to provide
coverage for independent contractors who are
appropriately licensed to engage in business if the
contract is outside your normal course of business.
Example: A restaurant owner hiring someone with
current required licenses to provide architectural
services to others does not need to report this work
for workers’ compensation coverage.
However, if the contract is for the same services
or product your business normally provides, you
may need to purchase coverage for independent
Chapter 2
5
contractors who don’t meet the rules for
exemption. Example: An architectural rm hiring
an individual licensed to provide architectural
services to work at the rm would need to provide
workers’ compensation coverage.
Please see Appendix C for more information
on independent contractors and to nd out
how to protect your business from liability if
subcontractors fail to pay required workers’
compensation premiums for their workers. You
may also refer to Independent Contractor Guide: A
Step-by-Step Guide to Hiring Independent Contractors
in Washington State on the web at Lni.wa.gov/go/
F101-063-000 or contact the Employer Services
Help Line at 360-902-4817.
Appendix C also explains how you can protect
your business from liability if subcontractors fail
to pay required workers’ compensation premiums
for their workers.
Trucking
Trucking industry employers are required to cover
their drivers for workers’ compensation regardless of
how they pay their drivers. However, they never need
to report more than 520 hours a quarter for a driver.
Intrastate trucking rms must cover their
Washington drivers in Washington. Trucking
rms engaged exclusively in interstate or foreign
commerce must provide workers’ compensation
coverage for their drivers, but it can be either through
Washington or under the laws of another state.
An independent contractor for trucking must
either own and operate their truck, or:
Be in a leased agreement to purchase the truck.
Make regular and scheduled payments for
the truck.
Be responsible for all maintenance,
insurance, fuel costs without reimbursement.
Be able to purchase the truck at the end of
the lease.
Be responsible for all licensing and taxes.
Be able to hire any driver the leasee chooses.
Professional and Semi-
Professional Athletic Teams
All professional and semi-professional athletes
playing for a Washington-domiciled sports team
are under mandatory Washington coverage.
Exception: The team regularly plays scheduled
games in another state, and:
The athlete and the league or team complete a
Sport Player Coverage Agreement designating
that another state will provide coverage.
The league or team and their insurance
carrier submit a completed Sport Team
Coverage Agreement conrming the players
will be covered in the other state.
Note: Amateur athletes are not covered by
Washington’s workers’ compensation laws. If
you have questions, please contact the Employer
Services Help Line at 360-902-4817.
Self-Insured Businesses
Employers with substantial resources and an
effective accident-prevention program may
qualify to provide workers’ compensation
insurance coverage for their employees through
self-insurance.
To qualify, an employer must meet certain criteria
as outlined in Washington Administrative Code
(WAC) 296-15-021.
A self-insured employer assumes all risks
and costs of workers’ compensation coverage.
Self-insured employers manage all aspects of
their workers’ compensation claims, including
authorizing benets according to Title 51 RCW
and paying all benets out of company funds.
L&I must certify self-insured employers.
Reporting and recordkeeping for self-insured
employers vary from those of employers
covered by L&I.
If you are interested in applying for self-insurance,
please see the Employers’ Guide to Self-Insurance in
Washington State at Lni.wa.gov/go/F207-079-000.
6
Chapter 3:
Opening an Account
To obtain workers’ compensation coverage
through the Washington State Fund, you must
open an account by completing and returning
a Business License Application. This form is
available online at dor.wa.gov or from ofces of
the Department of Revenue or Labor & Industries.
If you own an existing business and will be
hiring employees, please re-le the Business
License Application, indicating you are hiring.
Once you open an account, you will be assigned
an L&I account manager who can answer
questions specic to your company.
Employer Classifications
The basic premium for your workers’ compensation
coverage depends on the risk classication or
classications assigned to your business.
There are approximately 300 classications. Each
refers to a type, or several types, of business
activity and has its own basic insurance rate. This
rate reects the risk of workplace injury or disease
in the industry as a whole or industry activity.
Generally, it is the nature of business of the
employer that is classied, not the separate
occupations or operations of individual
employees within the employer’s business.
When you apply for an industrial insurance
account, State Fund underwriters will assign
one or more risk classications based on the
nature of business described on your application.
If the classications assigned to your business
do not appear to be correct, or the nature of
your business changes, a change in your risk
classication may be required. Example: If you
are a painting contractor and you begin doing
drywall work as well, a new risk classication
will need to be assigned to your business.
To request a change, or for more information on
employer risk classications, contact the Employer
Services Help Line at 360-902-4817.
Premium Rates
Soon after you open your workers’ compensation
account with L&I, you will receive a Workers’
Compensation Rate Notice. You also will receive a
new rate notice whenever L&I adjusts premium
rates or when your individual experience factor
rating is recalculated. This is usually mailed to you
in December, with any changes effective January 1.
This rate notice tells you the rate you will
pay per worker, per hour/unit for each risk
classication assigned to your business. We refer
to these hourly/unit rates as “composite rates”
because they are a combination of four separate
components: the accident fund, medical aid fund,
Stay at Work program, and the supplemental
pension fund. The rate notice also shows these
four elements individually.
Four state funds:
Accident-Fund premium. Only employers pay
this premium. It provides money to pay non-
medical claim costs such as wage-replacement,
most vocational services, permanent disability
benets and survivor benets.
Medical-Aid premium. Employers and employees
pay this premium. It pays for medical care and
Chapter 3
7
related services essential to an injured worker’s
recovery, including some vocational services.
Stay-at-Work premium. Employers and
employees pay this premium. It partially
reimburses employers for wages and other
expenses when they bring their injured workers
back to light-duty or transitional jobs.
Supplemental-Pension assessment. Employers
and employees pay this assessment. It provides
cost-of-living increases to injured workers with
extended disabilities. The Supplemental-Pension
assessment is not experience rated.
Payroll Deduction
Under state law, a portion of the premium due,
equal to one-half of the Medical Aid Fund rate,
Stay at Work rate, and Supplemental Pension Fund
assessment, may be paid by employee contribution.
L&I does not collect each worker’s share directly.
Instead, employers have the option to collect their
employees’ portion through payroll deductions.
The maximum payroll deduction rate for each
risk classication assigned to your business is
shown on your rate notice. It is illegal to withhold
more than the authorized amount.
Each pay period, calculate the amount you
withhold by multiplying the payroll deduction
rate (found on your Workers’ Compensation Rate
Notice) times the actual number of hours/units
each employee worked.
Some businesses choose not to make employee
payroll deductions. These businesses are still
responsible for paying the total premium due.
Experience Rating
What is experience rating?
It is the result of your workers’ hours or units
(exposure) and claims (losses) occurring during a
period that we call the “experience period.” This
result will affect your workers’ compensation
premium rates for a calendar year.
Every eligible employer is experience rated on an
annual basis. An eligible employer, as dened by
Washington Administrative Code, is an employer
who reported experience (worker hours or units)
during a given experience period.
Businesses that have common majority ownership
will be experience rated together on the same
policy and share the experience factor.
In most cases, businesses that are sold and
continue to perform the same operations
in Washington will have their experience
transferred to the new ownership.
What is the experience period?
The experience period is the oldest three of the
four scal years preceding the effective date
of premium rates. (Fiscal year = July 1 through
June 30.) The premium rates are effective on
January 1 of each year.
L&I calculates your experience factor by comparing
your workers’ compensation claim costs to the
expected costs for companies having the same
reported hours and risk classications as your
business. A business with an experience factor
greater than 1.0 will be assessed accident fund,
medical aid fund, and stay at work rates higher
than the base rates. Businesses with factors lower
than 1.0 will be assessed less than the accident
fund, medical aid fund, and stay at work base rates.
New businesses start out with a factor of 1.0 until
they become experience rated.
If an employer buys an existing business and
continues to perform the same operations in
Washington, in most cases the business’s existing
experience rating will be transferred to the new
owner (successor).
Claims with a date of injury (DOI) and worker
hours/units reported within the experience
period will be used in calculating the experience
factor for a given calendar year.
Chapter 3
8
These tables show which calendar years will be affected by claims, based on the date of injury.
Claims With A Date of
Injury (DOI) between
Affect an Employer’s Rates
for Calendar Years
7/1/19 – 6/30/20 2022, 2023, 2024
7/1/20 – 6/30/21 2023, 2024, 2025
7/1/21 – 6/30/22 2024, 2025, 2026
7/1/22 – 6/30/23 2025, 2026, 2027
7/1/23 – 6/30/24 2026, 2027, 2028
Calendar
Year
Experience Period – Claims &
Hours reported between
2024 7/1/19 – 6/30/22
2025 7/1/20 – 6/30/23
2026 7/1/21 – 6/30/24
2027 7/1/22 – 6/30/25
2028 7/1/23 – 6/30/26
How long will a claim affect my
premium rates?
A claim will affect your experience rating
and premium rates for three years. For
example, a claim with a date of injury between
July 1, 2023 and June 30, 2024 affects premiums
for calendar years 2026, 2027 and 2028.
How do I know what my experience
factor is?
The experience factor is printed on your Workers’
Compensation Rate Notice and on the L&I website
under Lni.wa.gov/ Verify. We determine your
premium rates by multiplying your experience
factor by the sum of the accident fund, medical aid
fund and the Stay at Work base rates, then adding
the supplemental pension fund assessment.
Employers qualify for a claim-free discount after three
years without a “compensable” claim (a claim involving
time-loss or permanent disability payments).
Most discounts start at 10% off the base rate for
the industry. As you hire more employees and your
business grows, so can your discount rate. Some
businesses earn discounts of up to 40%.
A single compensable claim will eliminate the
claim-free discount. Losing the discount may be
more costly than preventing time-loss (through
return-to work options) or keeping the injured
employee on your payroll (See Page 19).
Go to Lni.wa.gov/ClaimFreeDiscount
for more information.
9
Chapter 4:
Reporting and
Recordkeeping
How to File Quarterly Reports
The easiest way to le your Quarterly Report
and pay your insurance premiums is at
Lni.wa.gov/QuarterlyReports. Online reporting
automatically calculates premiums for you,
limiting errors and miscalculations. If you do not
have online access, please contact the Employer
Services Help Line at 360-902-4817.
Watch the mail for your Rate Notice.
We will mail you a rate notice that shows your
hourly premium rate for each risk classication. Like
other types of insurance, this hourly rate is based on
the risk of injury for that type of work or industry.
Keep careful payroll records.
Prepare by keeping accurate timesheets and payroll
records, as required by law. In most cases, you
will use your workers’ total work hours in order to
calculate the premium you owe. See the exceptions
listed on Pages 10–11 for more information.
Note: If you have no worker hours/units to
report, no premium is due. However, you must
still le an online quarterly report marked “zero
hours” or “no payroll.”
Get ready to calculate your
L&I payroll deductions.
Employers are responsible for paying all premiums
due. However, in Washington State workers may also
pay a share of the total hourly rate through payroll
deduction. The exact amount is shown on your rate
notice in the column “Employee Withholding.” You
may deduct that hourly share from your workers’ pay.
Be prepared to complete your first
Quarterly Report online and calculate
the premium you owe.
You must le your Quarterly Report and pay
your premiums each quarter. Even if you have no
employees or payroll hours to report, you must
le a report if you have an open account.
You have two options for online filing:
My L&I and QuickFile.
Both online systems show the risk classication(s)
and hourly rate(s) from your rate notice. To get
started, go to Lni.wa.gov/QuarterlyReports. See
Appendix D on Page 33 for examples.
My L&I is also the portal to the Claim and
Account Center where you have access to a wide
range of information. With in the Claim and
Account Center you can:
See all claim information as soon it come
into the claim le.
Send information to L&I about a claim.
Use our Trend and analysis tools to help you
review your claim trends.
File Quarterly Reports as a TPA for multiple
employers using our Deluxe or Bulk File features.
-
Go to Lni.wa.gov/insurance/quarterly-
reports/ling-on-behalf-of-clients or
email BulkFiling@Lni.wa.gov to get started.
Submit your Quarterly Report and
premium on time.
Quarterly Reports are due no later than the last day
of the month that follows the end of the quarter.
You will be charged a late fee for late ling.
Chapter 4
10
When Your Quarterly Reports Are Due
Quarter Due By
January 1 through March 31 April 30
April 1 through June 30 July 31
July 1 through September 30 October 31
October 1 through December 31 January 31
Determining Reportable
Worker Hours/Units
Generally, you should report the actual number
of hours/units worked by your employees. Do not
include sick leave hours, vacations or holidays, even
if it is paid leave. Report overtime work on a one-
to-one basis, in other words, each hour of overtime
work is reported as one hour, even though time-
and-a-half wages may have been paid.
Exceptions to reporting actual number of
hours worked include:
Drywall employer. Premiums for drywall
workers are based on the square footage of
material purchased for the job. If you have
questions, please contact your Account Manager.
Taxi and for-hire employers. Taxi and for-hire
employers with mandatorily covered employees
must report and may choose one of three
reporting methods: per driver (report 480 hours
per quarter for every driver), per vehicle (report
960 hours per quarter for every vehicle) or hourly
(report actual hours worked by every driver).
Taxi drivers, for-hire drivers and CTS owner/
operators. Taxi drivers, for-hire drivers and CTS
owner/operators who own or lease their vehicles
and elect to cover themselves with optional
(elective) coverage may choose one of three
reporting methods: per driver (report 480 hours
per quarter for every driver), per vehicle (report
960 hours per quarter for every vehicle) or hourly
(report actual hours worked by every driver).
Limousine and Cabulance drivers and
employers. Limousine and Cabulance drivers
and employers may report on a at rate per driver
(480 hours per driver per quarter) or actual hours
worked for every driver.
Resident property managers, caregivers, or
other live-in employment. When your resident
property managers, caregivers, or others work
irregular hours and receive a xed sum of money
or other compensation, such as free or reduced
rent, for their work, you must report and pay
premiums using the following procedures:
Divide each worker’s total compensation for the
quarter (salary plus the market value of other
compensation) by the “Average Hourly Wage”
for the appropriate risk classication assigned
to your account. You must call the Employer
Services Help Line at 360-902-4817 each April to
obtain the updated Average Hourly Wage.
Inside commissioned personnel. You must report
the actual hours worked by all inside employees
paid on a commission basis.
Commissioned personnel. If you pay your
workers a percentage of the amount charged for
the product or service, they are commissioned
workers. For commission employees who work
primarily at your premises, you must report actual
hours. For commission employees who work
primarily away from your premises, you may
report either assumed or actual hours worked,
if a daily record of actual hours is kept for each
worker. You must report all of your commission
workers using the same method (either assumed or
actual hours), even if they work part-time.
You must keep a record of the date each employee
begins and ends employment. If you report assumed
hours, you may report either eight hours for each
day any work is performed or report 160 hours
per month. If you are using the 160-hour rule, you
may report 8 hours per day for new or terminated
workers who work a partial month at the beginning
or end of their employment. No reduction to
reportable hours can be made for vacation, holiday
or sick leave when reporting assumed hours.
Salaried personnel. You may report salaried
workers using either 160 assumed hours per
month for each worker or report the actual hours
Chapter 4
11
worked, if a daily record of actual hours is kept for
each worker. You must report all of your salaried
workers using the same method (either assumed
or actual hours), even if they work part-time.
You must keep a record of the date each worker
begins and ends employment. If you are using the 160-
hour rule, you may report 8 hours per day for new or
terminated workers who work a partial month at the
beginning or end of their employment. No reduction
to reportable hours can be made for vacation, holiday
or sick leave when using the 160-hour rule.
Piece workers. If an employee’s pay is based on
completing tasks that are measured by the pound,
ton, acre, unit, foot or other method, you must
report actual hours worked.
Optional “elective” coverages. If your business
provides optional coverage for an owner (sole
proprietor, partner, exempt LLC member or
manager, or corporate ofcer), you may report
either 480 hours per quarter or actual hours, if a
daily record of actual hours is kept. If you have
optional coverage for other exempt workers, you
must follow the reporting rules for salary, hourly,
commission or piecework, as applicable.
Volunteers, student volunteers and unpaid
students. Businesses and nonprots who elect
coverage for their volunteers, student volunteers or
unpaid students with optional (elective) coverage
may choose to report 100 hours per qualifying
volunteer per calendar year, or actual hours.
Splitting Worker Hours
The worker hours of any one employee may be
divided for reporting purposes between two or
more assigned basic risk classications. This may
be done only when accurate records of actual
hours worked, supported by original timecard or
time-book entries, document the division of duties.
You may not divide a worker’s hours between a
“basic” classication and a “standard exception”
classication, or between two standard exception
classes. Standard exceptions are clerical ofce
(class 4904), auto/truck/camper/trailer/mobile
home/motorcycle and pleasure craft sales
personnel (class 6301), outside sales (class 6303),
LLC members/manager (class 7100), and
corporate ofcers (class 7101).
If you do not keep accurate records of divided
worker hours, all of a worker’s hours must be
reported in the highest rated classication in which
the worker has duties. Estimates or percentages are
not acceptable documentation for splitting hours.
Employers may reduce premium costs in cases where
dividing a worker’s hours between risk classications
is allowable. If you are unsure if a division is allowed
for a particular situation, please contact the Employer
Services Help Line at 360-902-4817.
If You Fail to File Your
Reports or Pay Premiums
If you fail to le a quarterly report, L&I will
estimate the premiums due based on the best
information we have available and we will take
steps to collect the premiums owed.
We also assess penalties on delinquent accounts.
The longer the account is delinquent, the greater
the penalt y.
The minimum penalty is $10. You must submit
a report even if you report no hours/units. A
late report indicating “no hours/units” will be
assessed a $10 penalty.
Interest will be assessed on all delinquent
accounts at a rate of 1% per month on the
premium owed. We count the number of calendar
days elapsed since the due date including the date
we receive the report or payment.
Other penalties may be assessed for non-payment of
premiums, misrepresentations, excessive deductions
from employees, failure to keep adequate timesheets
and payroll records or other violations.
Taxi, Limousine, or Cabulance rms that fail to le
or pay workers’ compensation premiums to L&I
can have their for-hire certicates suspended and
eventually revoked by the Department of Licensing.
Chapter 4
12
Delinquent Accounts
Number of
months late
Penalty amount
No penalty amount will be less than $10
Interest assessed
1 Total of 5% of the premium due 1% interest on the premium due
2 Total of 10% of the premium due 2% interest on the premium due
3 Total of 20% of the premium due 3% interest on the premium due
4+ Additional 1% interest each month until the premium is paid
Recordkeeping
State law requires every employer to keep
records that will allow Labor & Industries to
compute premiums. These records must be open
for examination by L&I. Accurate, properly
maintained records will help you manage your
business and, in case of an audit, minimize the
time needed for an accurate review.
To properly document hours reported on quarterly
reports, maintain the following payroll and time
records on each employee for at least three years:
Employee name, address and Social
Security number.
Date hired (and terminated, if applicable).
Job title and type of work performed.
(See “Splitting Worker Hours” on Page 11.)
Type of compensation (hourly, salary,
commission, etc.).
Pay period.
Actual hours worked each day.
-
You must keep records of actual hours
worked for workers paid on an hourly
or piecework basis. The number of units
earned or produced for piece workers
must also be recorded.
-
Keeping records of the actual hours
that outside commissioned and salaried
employees work is optional but a record
of days worked is required if using the
8-hour per day premium option.
-
If an employee is assigned to more than one
risk classication, records of actual hours
worked each day must also show how many
hours the employee worked in each class.
Gross pay.
Deductions from earnings and the purpose
of each deduction.
Net pay.
Check numbers of checks issued.
In addition to payroll and time records, the
following tax records also need to be maintained
for at least three years:
Unemployment tax returns from the
Employment Security Department.
State excise tax returns from the Department
of Revenue.
Internal Revenue Service forms and tax
returns. For example, W-2 statements, Form 941
(quarterly report), Form 1099 (miscellaneous
income), Form 1065 (partnership return),
Form 1040 (Schedule C Corporate return).
Other records and information that may need to
be referenced include:
Check registers.
Canceled checks.
Cash disbursement journal (materials and
supplies; miscellaneous contract labor).
Corporation or LLC documents, articles of
incorporation, organization bylaws, operating
agreement, and minutes of meetings.
Contracts, invoices, nancial statements,
worksheets maintained for industrial
insurance reports, and subcontractor
records, specically the:
-
Legal name.
-
Registration or license number.
-
UBI or L&I account ID number.
Chapter 4
13
Accident Records
Keep complete records of all accidents, including
minor ones. Even minor mishaps sometimes turn
into injuries that require medical attention.
Accident-related records you should keep are:
The injured worker’s Report of Accident.
The supervisor’s Report of Accident.
Industrial insurance claim log.
Claim date record.
OSHA 300 log, if you have 10 or more
employees at all times during the calendar year
at all of your business locations combined.
Use these records for completing the Employer
Report of Industrial Injury or Occupational Disease
form or when resolving claim disputes.
Audits
L&I may audit your employment records. During
an audit, an L&I auditor will inspect your business
operations and examine records to verify that your
workers’ payroll and hours have been reported
accurately. An L&I auditor also will ensure that
worker hours and claims associated with your
account are in the appropriate risk classication.
Posting Requirements
Workers’ compensation laws and regulations
that L&I enforces require employers to post the
following information:
Certificate of coverage
You are required to obtain a certicate of insurance
coverage and post it conspicuously in your place
of business. You must have a separate certicate
of coverage in each business location you operate.
The certicate is issued when you open your
account with L&I. You can obtain replacements
by calling the L&I ofce nearest you or online at
Lni.wa.gov/Verif y. Local ofce telephone numbers
are listed in the back of this publication.
Required posters
L&I will send you three posters that inform your
employees of their rights and responsibilities
as workers. They must be displayed where
employees can see them.
The required posters are:
Notice to Employees
—
If a Job Injury Occurs
(F242-191-909).
Job Safety and Health Law (F416-081-909).
Your Rights as a Worker (F700-074-909).
You can obtain free copies of these posters by
calling any local L&I ofce or ordering online at
Lni.wa.gov/RequiredPosters.
14
Chapter 5:
Employee Benefits
Employees are eligible for workers’ compensation
benets when a work-related injury or
occupational illness occurs. Benets also are paid
if an employee is injured during a meal period
at the job site, even though the person was not
working at the time.
Benets are not paid for intentional self-inicted
injuries or for injuries to an employee who is
committing or attempting to commit a felony.
All benet levels and the conditions for benets
are normally set by the state Legislature.
Types of Benefits
Medical services. If your employee’s claim is
accepted, L&I pays for all approved health care
providers, hospital, surgical, pharmacy and
other health care services necessary for the
treatment of your employee’s workplace injury
or occupational disease.
Injured employees may select a health care
provider who is qualied to treat their injury or
occupational disease.
Injured workers must get ongoing care from a
medical provider who is part of the L&I Medical
Provider Network. They may see a non-network
provider for the initial visit, but for additional
or ongoing care, they will need to transfer to a
network provider.
Other services may include, but are not limited
to, emergency ambulance service, special or home
nursing care, dental repair, convalescent center
care, crutches, braces, articial limbs, glasses and
hearing aids.
Some automobile and home modication costs are
covered for employees suffering amputation or
paralysis. These employees also receive lifetime
prosthesis maintenance, including replacements
needed because of normal wear-and-tear of the
prosthesis or related physical changes.
Travel expenses. L&I can reimburse pre-approved
out-of-pocket travel expenses when the injured
worker must travel more than 15 miles from their
home to receive adequate health care services,
vocational training or tting for a prosthetic device.
Time-loss compensation payments (wage-
replacement benets). Employees receive a
percentage of their regular wages if they are
unable to work because of a work-related
injury or illness. These are known as time-loss
compensation payments.
The employee is not paid for the day of injury.
Benets are not paid for the rst three calendar
days following the injury unless they are unable
to work for a period of seven or more consecutive
calendar days from the date of injury. An
unsuccessful attempt to return to work within the
7-day period will not affect eligibility for payment
for the rst three days following the day of injury.
If the employee becomes disabled later than three
days after an injury, time-loss compensation
payments begin on the rst day they are unable
to work.
Time-loss compensation payments range from
60% to 75% of the injured worker’s gross wage
depending upon the worker’s marital status
and number of children at the time of injury.
These benets cannot exceed 120% of the state’s
Chapter 5
15
average wage. (The state’s average wage varies;
it is established by the Employment Security
Department on July 1 of each year.)
Stay at Work Program. Stay at Work is a nancial
incentive program that encourages employers
to bring their injured workers quickly and
safely back to light-duty or transitional work by
reimbursing them for a portion of their costs.
Eligible employers can be reimbursed for 50%
of the base wages they pay for light duty (up to
66 days/$10,000), plus many expenses.
The purpose of this incentive is to encourage
more employers to return their injured workers
to medically approved light duty or transitional
work with the doctor’s approval. This best
practice can help workers recover and reduce
costs for employers.
For more information, visit
Lni.wa.gov/StayAtWork.
Vocational rehabilitation. L&I may assign
a vocational counselor to help an injured
worker and employer explore return to work
opportunities. An injured worker who is unable
to work within their restrictions may be eligible
for retraining assistance to learn new skills.
Other return-to-work help. L&I can contribute up
to $5,000 to help you modify a job to t an injured
employee’s abilities.
Permanent partial disability awards. If your
employee’s work-related injury or occupational
disease caused permanent loss of bodily
function, they will receive a permanent partial
disability award in an amount established by
the Legislature.
Pension awards. A monthly pension for life is
granted to an employee whose injury or illness
results in permanent inability to work, based on
medical and vocational reports.
Pensions also are granted if the accident results in
the loss of both legs, both arms, or the loss of a leg
and an arm, total loss of eyesight or paralysis.
Pension benets are referred to as permanent
total disability (PTD) awards.
Previously paid permanent partial disability
awards reduce an employee’s pension benet
amount. Adjustments in pension benets are also
made when the disabled employee chooses to leave
a benet for their spouse and children upon death.
Survivor benets. The surviving spouse and
legally dependent children receive a monthly
pension if a work-related injury or occupational
illness results in an employee’s death.
The amount they receive is based on the formula
used for setting time-loss compensation payments.
In addition, survivors receive an immediate cash
payment of 100% of the state’s average monthly
wage in effect on the date of injury, plus funeral
expenses of up to 200% of the state’s average
monthly wage in effect on the date of death. The
state’s average wage changes each July 1.
If the surviving spouse remarries, they may
choose either a nal cash settlement or the right
to resume monthly pension payments if the
marriage is terminated.
Even if the surviving spouse remarries, the
employee’s dependent children continue
to receive monthly benets while they are
dependent, typically until age 18 or, if they are
still in school, until age 23.
If the deceased was a member of the Law
Enforcement Ofcers’ and Fireghters’ retirement
system or the State Patrol retirement system, the
surviving spouse may be eligible for further benets
through the Department of Retirement Systems. For
more information, contact DRS at 1-800-547-6657.
Structured Settlement Agreements. A Structured
Settlement Agreement is an agreement between
a worker, the employer, and L&I to resolve a
claim. The agreement generally resolves all future
benets except medical. Workers are still eligible
to receive medical treatment for conditions
allowed on their claim and can le a future claim
if a new injury occurs.
Chapter 5
16
In most structured settlements, the claim is closed.
The worker is paid a set amount in periodic
payments, which are spelled out in the agreement.
To be eligible, an injured worker must:
Be 50 years of age or older.
Have an allowed workers’ compensation
claim in Washington.
Wait at least 180 days after L&I or the self-
insured employer received the claim.
Employers may initiate structured settlement
discussions for an eligible worker’s claim by ling
an application with L&I. However, structured
settlement is a voluntary program, and all parties
have to agree. L&I negotiates the amount to be
paid and submits the agreement to the Board of
Industrial Insurance Appeals.
For more information or to initiate structured
settlement discussions, please visit
Lni.wa.gov/Settlement.
Gross Income
When calculating an employee’s benets, L&I
will rst establish the employee’s gross income
at the time of the injury.* L&I will issue a “wage
order” providing the employee and you with
the information that was used to calculate the
employee’s gross monthly income.
* If your employee has an occupational disease, gross
income is based on the date the employee’s condition
rst required medical treatment or became disabling,
whichever came rst.
The following are used to calculate gross
monthly income:
Gross wages earned before taxes, including
income from a second job.
Employer-provided medical, dental and
vision benets.
The reasonable value of room and board,
housing, fuel or similar considerations
received from the employer as part of the
employee’s income.
Any bonus the worker received within the
twelve months immediately preceding the
injury as a part of the contract of hire with
the employer of injury.
Tips reported by the employer for federal
income tax purposes.
Normally worked overtime hours are included.
If your employee’s work pattern is determined to
be exclusively seasonal, essentially part-time or
intermittent, their gross monthly income would
be determined by averaging the total wages
earned, including overtime pay and tips, from all
employment in any 12 successive calendar months
preceding the injury that most fairly represents
the employee’s employment pattern.
17
Chapter 6:
If an Injury or
Illness Occurs
Filing an Accident Report
If a job-related injury or illness occurs, you and
your employees have certain legal responsibilities.
What the injured worker must do
Report the injury or exposure and how
it happened to a supervisor as soon as
possible. Even minor injuries should be
reported, but failure to report will not cause
rejection of a claim.
If medical attention is required, tell the
treating health care provider the injury
is job-related. The provider will help
the worker complete a Report of Accident
(Workplace Injury, Accident or Occupational
Disease), which begins the claim process.
This form, also called Report of Accident or
ROA, must be led with L&I within one year
of the date of injury.
File a claim online at Lni.wa.gov/FileFast
to expedite the process, or by phone at
1-877-561-FILE (3453). Answer all questions on
the worker’s section of the Report of Accident
to avoid a possible delay in benet payments.
For occupational diseases or illnesses, such
as carpal tunnel syndrome, noise-induced
hearing loss, occupational dermatitis and
occupational asthma, the Report of Accident
(Workplace Injury, Accident or Occupational
Disease) must be led within two years of
receiving written notice from a doctor that
the condition exists and is work-related.
What the attending health care
provider must do
The attending health care provider also lls in
a section of the Report of Accident. The provider
must supply information such as the diagnosis
and treatment given and provide an estimate of
how many days your employee will be unable
to work. Attending providers are responsible
for submitting the Report of Accident to L&I.
Upon receiving the Report of Accident, L&I mails
a letter and Employer Report of Industrial Injury
or Occupational Disease form to you. It serves as
your ofcial notice that a claim for benets has
been led by one of your employees.
What the employer must do
Make sure your employee immediately
obtains required medical care from the doctor
or hospital of their choice. Injured workers
must choose a health care provider who is
part of the L&I Medical Provider Network.
-
They may see a non-network provider
for the initial visit, but for additional or
ongoing care, they will need to transfer
to a network provider. You can help your
employee nd a network provider in our
online directory at Lni.wa.gov/FindaDoc.
-
Note: Out-of-state providers are not
required to be in the network.
Provide transportation or emergency ambulance
service, if needed. L&I will reimburse for these
transportation costs upon written request.
A workplace fatality or in-patient
hospitalization of any employee must be
reported to L&I within 8 hours of the incident.
Chapter 6
18
Any non-hospitalized amputation or loss of an
eye(s) must be reported within 24 hours of the
incident. Note: This applies to all employers
with workers working in Washington
no matter what industry they work in
and regardless of workers’ compensation
coverage. You must report by calling L&I at
1-800-423-7233 or by visiting your local L&I
ofce. Please see Lni.wa.gov/safety-health for
further details and information you need to
include when reporting.
When you receive a request for employer
information from L&I, including your copy
of the Report of Accident, complete and return
the information as soon as possible. You
may do this online at Lni.wa.gov/FileFast to
expedite the process.
Please answer all questions completely. If
you notice errors in the information reported,
provide corrected information. We must
have accurate wage and certain benet
information because it is used to calculate
time-loss compensation benets for the injured
employee. Verify your employee’s information,
such as gross wages and hours worked.
If you question the validity of the claim,
state it on the form and explain your reasons
why. This will help minimize invalid claims.
If someone not employed by you caused the
accident, you should indicate this on the
form. It is to your advantage to document
the case and provide complete records of
facts and all evidence surrounding the
accident. (See “Worker recourse for injuries
caused by a third party” on Page 21.)
Confidentiality: It’s the Law
Revealing of Mental Health
Conditions and Treatment
As an employer, you must only share workers’
compensation claim information with people who
are authorized.
Examples of people you can communicate with
about the claim are:
The worker or their representative.
Your authorized representatives.
Medical providers treating or examining
the worker.
Vocational Rehabilitation Counselor(s) who
are providing services on the claim.
Authorized L&I personnel.
The employer is subject to a civil penalty of $1000 per
occurrence for revealing claim le information about
mental health conditions or treatment to anyone
besides authorized representatives.
Examples:
Example 1: An employer sends an electronic
correspondence to three people unauthorized to
receive claim information. The correspondence
shares a worker’s mental health condition from
the claim le. Since the information was sent
through one electronic correspondence, the
employer will be charged for one occurrence.
Example 2: One of the unauthorized people in
Example 1 forwarded the electronic correspondence
to an unauthorized person the next morning. Later
that afternoon, that same person sent an additional
correspondence to another unauthorized person.
Since the unauthorized person sent the mental
health information to other unauthorized people
on two separate occasions, the employer will be
charged for two additional occurrences.
Example 3: On three separate occasions an
authorized representative verbally shares mental
health information from a worker’s claim le
with three different unauthorized people. Since
the information was shared in three separate
conversations, the employer will be charged for
three occurrences.
All complaints from the worker regarding this
violation must be investigated to determine if
the employer or their authorized representative
violated RCW 51.28.070.
Chapter 6
19
Get Involved in Your Claims
Workers’ compensation claims affect your rates.
You can take steps to control claim costs and
affect your future premiums.
Use the Online Claim and
Account Center (CAC)
CAC allows you to see information as soon as it
comes into the claim le. By staying current, you
can respond quickly to new information. Follow
your claims, access your account and nd more
information at Lni.wa.gov/ClaimInfo.
Go Paperless! Get your claims
correspondence online
Get correspondence right away instead of waiting
for it to arrive in the mail. Online correspondence
means no envelopes to open, no letters to sort,
and nothing to shred
—
saving you time and
resources. Quickly lter down to messages where
action is required of you, search by keyword
such as “claim allowed,” sort by injured worker
name, and even respond by secure message with
a single click!
Find more information and sign up at
Lni.wa.gov/eCorr.
Stay in touch with your employee
Call your employee right away to share your
concern about the injury. Do what you can to get
them back to work as soon as possible.
Provide light-duty work
The health care provider may limit work activities
or reduce the number of hours your employee
can work during recovery. Offering light-duty
within those restrictions will get your employee
back to work faster and reduce claim costs. For
help in developing light-duty work, contact a
Return-to-Work Specialist at your local L&I ofce.
Consider “Stay at Work” Program
L&I’s Stay at Work Program is a nancial incentive
program that encourages employers to bring
their injured workers quickly and safely back
to medically approved light duty or transitional
work by reimbursing them for a portion of their
costs. This best practice can help the worker
recover faster and reduce costs for employers.
Eligible employers can be reimbursed for 50% of
the base wages they pay to the injured worker
(up to 66 days/$10,000) and for some of the cost of
training, tools or clothing the worker will need to
do the light-duty or transitional work.
Why consider Stay at Work?
It may reduce your claim costs.
It helps injured workers recover.
It can help retain valuable employees and
increases workplace morale.
We’ve made it easy for you to apply.
Learn more at Lni.wa.gov/StayAtWork or call
1-866-406-2482.
L&I’s Early Return to Work Program
The Early Return to Work (ERTW) Program
encourages return to work options much earlier in the
claims process, to everyone’s benet. And if you are
able to create a light-duty job for the still-recovering
workers, the Stay at Work Program could reimburse
you for half the wages and some related expenses.
Keep your employee on salary (KOS)
You can choose to pay the full amount of usual
wages and benets to your employee while they
are off work due to the injury. When you use
KOS, L&I doesn’t pay time-loss benets. KOS
will not prevent a ruling of Permanent Partial
Disability (PPD), which will impact your rates
similarly to time loss. To nd out if KOS will
benet your company, contact your account
manager or Risk Management Consultant. They
will review your claim history and premiums
and discuss how KOS can affect your future rates.
Chapter 6
20
Available Resources
for Employers
L&I provides, free of charge, these consultation
services available before (and after) an injury occurs:
A Risk Management Consultant who can
show you how a workers’ compensation
claim affects your company’s “experience
factor” and premiums so that you are aware
of the potential costs of an injury.
A Safety or Health Consultant who can provide
an onsite consultation to identify hazards and
show you the safety steps to prevent injuries.
To request a safety or risk management
consultation, go to Lni.wa.gov/SafetyConsultants
or contact the L&I ofce nearest you.
You can take advantage of specic Early Return to
Work services that may include:
L&I staff located around the state who can
work with you, free of charge, to help bring
your employee back to work quickly and safely.
Job modication funds to help you cover the costs
of modifying a job to allow an injured worker to
return to work. Modications may be achieved
through tools, equipment, training, and/or
alterations to the worksite up to $5,000 per job.
To learn more about L&I’s Early Return to Work
Program, go to Lni.wa.gov and type “Early
Return to Work” in the search box or call the
nearest L&I ofce and ask for an Early Return to
Work specialist.
Know Your Protest and
Appeal Rights
L&I will send legal decisions to you. If you disagree
with a decision or believe it’s incorrect, you must send a
written protest or appeal before the deadline specied
in the decision. Once the deadline has passed, L&I
can’t change the decision, even if it’s wrong.
Monitoring claim costs is important because L&I
uses these costs in computing your premium rates.
When L&I allows or closes your employee’s claim,
we will send you the decision (also called an “order”).
All correspondence and other documents about
the claim, including from the claim manager and
medical provider, are available online through the
Claim and Account Center at Lni.wa.gov/ClaimInfo.
By routinely checking these reports, you can stay
informed of injury costs charged to your account.
You can monitor your employee’s progress and
correct any information related to time-loss benets
or medical benets, or medical costs. (See Chapter 8:
“If You Disagree With an L&I Decision” on Page 25.)
Discrimination
Against Workers
The law prohibits you from discriminating
against employees in any way for exercising
their rights under the workers’ compensation
law or for ling a complaint about workplace
safety. However, it does not prevent you from
taking action against an employee for unsafe
work practices. Find more information online at
Lni.wa.gov/WorkplaceDiscrimination.
Financial Protections
for Employers
Protection against “second injury” risks
There are special situations, called “second injury
claims,” in which certain claim costs are not charged
to you and do not affect your experience rating.
Instead, these claim costs are paid from the Second
Injury Fund, which was created to encourage
employers to hire previously disabled workers. It
protects you against certain nancial risks should
such workers suffer further injury after you hire them.
The Second Injury Fund comes to your aid in
three ways:
Relief of certain pension costs. If a worker’s
death or permanent total disability is
caused by the combined effect of a previous
disability and a new occupational injury,
Chapter 6
21
and not by the injury alone, all claim costs
not directly related to the new injury will be
paid out of the Second Injury Fund.
-
Only those claim costs directly related to
the new occupational injury will go on
your accident experience record.
Relief of all claim costs. The Second Injury
Fund also is used to pay all claim costs
arising from a preferred worker claim.
(See “Preferred Worker Program” below.)
Job modication costs. Second Injury Funds
may be used to modify a job to allow an
injured worker to return to work within
their restrictions.
Protection against catastrophic accidents
Washington’s workers’ compensation system
protects employers against massive losses that
can result from a major catastrophic accident.
If a single accident kills or permanently disables
three or more workers, the employer’s accident
experience record is charged for the cost of only
two single pension claims
—
each equal to the
average of all pension claims resulting from that
catastrophic accident.
Worker recourse for injuries caused
by a third party
If one of your workers suffers a job-related injury
or occupational disease, they cannot ordinarily
sue for damages. However, the injured worker
may take legal action to recover damages if
someone not in your employ
—
a “third party”
—
was responsible for the injury.
Third-party actions involve negligence on the part
of someone not working for you. For example:
The driver of a vehicle that hit the worker.
The manufacturer of a defective product that
injured the worker.
A property owner who failed to properly
maintain the premises.
The owner of an animal that bit the worker.
How does third-party action benet you, the
employer? Successful third-party action benets
you because the amount recovered can be
credited to your workers’ compensation insurance
account, reducing the effect the claim has on your
experience rating. (See Page 7.)
Keep in the mind the following points about
third-party action. If you have questions, contact
the Third Party Section at 360-902-5100.
The injured worker may initiate a third-
party action or L&I may, if the worker
chooses not to do so. The employer cannot
initiate this action.
The injured worker continues to receive
workers’ compensation benets while they
or L&I pursues legal action.
L&I approval is required for any settlement
that doesn’t cover the costs of the claim.
If the injured worker receives a nancial
settlement and has funds remaining
after repaying claim costs, their workers’
compensation benets would stop. Benets
might resume in the future depending on
the amount of the remaining recovery and
how long the worker is unable to work or
continues to receive medical care.
Preferred Worker Program
Under the Preferred Worker Program, you can hire
qualied employees who previously have been
injured and receive the following nancial benets:
Premiums waived. You are exempt from
paying premiums on the worker for up to
three years after you initially hire them.
(However, you and the worker must pay the
supplemental-pension assessment.)
No injury costs. No claim costs will be
charged against your account if the worker
is injured on the job within three years of
becoming a preferred worker.
You receive these cost-saving benets when you
hire a worker who must change jobs because of
an industrial injury or occupational disease.
Chapter 6
22
Additional benets from the Preferred Worker
Program include:
Up to $20,000 in new incentives to the eligible
hiring employer, plus reimbursement for
some costs for clothing and equipment
needed by the worker to perform the new job.
New job opportunities for qualifying
injured workers.
If you wish to hire a preferred worker, you
must complete the Preferred Worker Request
form and return it to L&I before the person
starts work. Information on the program,
along with the necessary form, is available
from the L&I ofce nearest you or online at
Lni.wa.gov/PreferredWorker.
If a preferred worker is hurt on the job, be sure
to say in your incident report that you hired the
person under the Preferred Worker Program.
Indicate class code 7204 on the employer’s section
of the Report of Accident (Workplace Injury, Accident
or Occupational Disease). Alerting L&I that the
claim involves a preferred worker prevents you
from being charged claim costs. If you have
questions, contact the Employer Services Help
Line at 360-902-4817.
23
Chapter 7:
Prevent Injuries and
Control Your Costs
Preventing an injury or illness is the most effective
way to protect your employees and limit the
nancial impacts of workers’ compensation claims.
You can also take other steps to manage a claim, if
one occurs, to help reduce claims-related costs.
Focus on Safety
Know the safety and health rules for
your workplace
L&I’s Division of Occupational Safety and
Health (DOSH) is responsible for developing and
enforcing workplace safety and health rules. Go to
Lni.wa.gov/safety-health or call 1-800-423-7233 for
information on safety and health, rules, policies,
sample safety programs and general assistance.
Your compliance with these rules helps you
protect your employees from workplace hazards.
Here are two examples:
Rule Example 1: You are required to identify
the hazards in your workplace and develop and
maintain a written accident prevention program
(APP) tailored to the hazards of your specic
workplace. To learn more about developing an
APP, visit Lni.wa.gov/AccidentPrevention, call
the L&I ofce nearest you or call 1-800-423-7233.
Rule Example 2: You must make sure that rst-
aid personnel are available to provide quick
and effective rst aid. In the absence of a clinic
or hospital in near proximity to the workplace,
which can be used for the treatment of all injured
employees, you must train one or more persons
to provide rst aid. First aid kits must also be
available in the workplace.
For information on rst-aid training classes, you
can contact the American Red Cross, Evergreen
Safety Council or your local re department,
hospital or community college.
Training tools and other resources
At the “Safety and Health” section of L&I’s
website, you’ll nd training tools, online videos
and educational materials to help you create and
maintain a safe and healthy workplace. Visit
Lni.wa.gov/safety-health for more information.
Request a no-fee safety or
health consultation
Do you know the safety and health requirements
that apply to your business? If you’re not sure, you
may want to request a safety or health consultation
from L&I. A consultant
—
not an inspector
—
will
meet with you and conduct a no-fee, condential
walkthrough survey of your work site to identify
hazards and recommend remedies. You must
correct in a timely manner any serious hazards
found during the consultation, but the consultant
will not issue a citation or ne you.
The goal of a consultation is to help you self-monitor
your work environment so you can recognize hazards
and x them before accidents occur. If you comply with
safety and health rules, your employees will be better
protected than if you simply tell them, “Be careful.”
To request a no-fee consultation, visit
Lni.wa.gov/SafetyConsultants or call the L&I ofce
nearest you and ask to speak to the Consultation
Manager. In addition to safety and health
consultations, specialists in ergonomics and risk
management are available to assist employers.
Chapter 7
24
Send the right message to your employees
Make your commitment to safety clear to your
employees. Take positive steps to build a safety
“culture.” Don’t tolerate behavior that disregards
safety and health rules and safe work practices.
Positive steps you can take include:
Develop a written safety and health program
and share it with employees. A program
communicates your commitment to safety and
health and denes what is expected of workers.
Encourage employees to come forward with
safety or health concerns. Employees are
often the best source of ideas for making
changes that reduce workplace hazards.
Empower your safety committee and hold
regular meetings.
Discuss safety in your orientation for new
employees.
Provide the training employees need to do
new jobs or tasks safely.
Visit the Safety and Health section of L&I’s
website to learn more about the safety and
health services available to employers:
Lni.wa.gov/safety-health. These services include
online training programs, publications, a video
library and other training aids to help you build a
strong safety culture.
Manage Claims
Prevention through safety is the best defense
against the emotional costs of a workplace
injury and the nancial impact of a workers’
compensation claim. However, you should have a
system in place to manage a claim if an injury does
occur. At a minimum, this system should include:
Investigate any accident or “near miss.” The
purpose is not to x blame or deny benets to
anyone injured, but to determine what steps
can be taken to avoid such incidents in the
future. (See “Accident Records” on Page 13.)
Monitor claims consistently by assigning
one person to handle them. You will want to
keep track of important dates and deadlines
for protests or appeals.
Get involved in your employees’ claims. (See
Page 19 for steps you can take to control costs.)
Learn about and take advantage of return-to-
work strategies. The goal is to get an injured
worker back to work as soon as possible. For
example, some workers can carry out different
tasks or work part-time until they are fully
recovered. Read about L&I’s Stay at Work
Program on Page 19 to see if it’s right for you.
For more information about managing claims
effectively, contact the L&I ofce nearest you and
ask to speak to a risk management specialist.
Consider Retrospective Rating
If you are committed to operating a safe
workplace, preventing accidents, and managing
workers’ compensation claims effectively, you
may be interested in L&I’s Retrospective Rating
Program (Retro).
Retro is an optional nancial incentive program
offered by Labor & Industries to help qualifying
employers reduce their workers’ compensation
costs. Employers can enroll on their own or in
a group plan sponsored by a trade association
or professional organization. Employers may
receive premium refunds or they may be assessed
additional premium based on their performance.
Enrollment in this program occurs four times
each year. Coverage runs for one year, beginning
January 1, April 1, July 1 or October 1.
Learn more at Lni.wa.gov/Retro or call
360-902-4851 or email to Retro@Lni.wa.gov.
25
Chapter 8:
If You Disagree
with an L&I Decision
The Department of Labor & Industries makes
many decisions that may affect your business,
such as audit ndings or actions on industrial
insurance claims. You have the right to protest or
appeal any decision and you must follow certain
legal procedures to protect your rights.
You may either protest/request a reconsideration
or appeal. The information below provides
general guidance. Every order issued by L&I
should contain a notice of your appeal rights.
Please be sure to follow the information on your
order if you wish to preserve your right to appeal.
Protest/Reconsideration
If you disagree with a decision, you must
send a letter to L&I protesting or requesting
reconsideration of the ruling. Explain why you
think it is incorrect and provide any information
L&I should consider before making a further
decision. Please be specic.
If L&I’s decision is in the form of a “Notice and
Order of Assessment,” you must submit your
request within 30 days of the day you receive the
Notice. For all other decisions of the department,
you have 60 days in which to submit your
requests. If you write us within the appropriate
time period after receiving a legal “Notice and
Order,” the law requires us to respond to your
protest with another written decision. This may
either change or reafrm our earlier ruling.
If you disagree with the second decision, you
may appeal in writing to the Board of Industrial
Insurance Appeals in Olympia.
Appeal
You may appeal an L&I decision to the Board of
Industrial Insurance Appeals.
The Board of Industrial Insurance Appeals
is separate and independent from L&I. It is a
quasi-judicial agency that conducts hearings
when workers’ compensation issues cannot be
resolved at L&I to the satisfaction of you, your
employee or L&I.
For complete information, please go to
biia.wa.gov for a copy of the booklet, “Your Right
to Be Heard,” or call 360-753-6823.
Additional information on rm appeals is
available at Lni.wa.gov/claims/for-medical-
providers/appeal-an-l-i-claim-decision.
26
Appendix A
Definition of an Employer
For purposes of workers’ compensation coverage, an
employer is dened as follows within RCW 51.08.070.
“Employer” means any person, body of
persons, corporate or otherwise, and the
legal representatives of a deceased employer,
all while engaged in this state in any work
covered by the provisions of this title, by way
of trade or business, or who contracts with one
or more workers, the essence of which is the
personal labor of such worker or workers. Or
as an exception to the denition of employer,
persons or entities are not employers when
they contract or agree to remunerate the
services performed by an individual who
meets the tests set forth in subsections (1)
through (6) of RCW 51.08.195 or the separate
tests set forth in RCW 51.08.181 for work
performed that requires registration under
Chapter 18.27 RCW or licensing under
Chapter 19.28 RCW.
To refer to the RCWs noted above, go to
Lni.wa.gov/rulemaking-activity. If you have any
questions about whether you are considered an
employer for the purpose of workers’ compensation
insurance coverage, refer to L&I’s Independent
Contractor Guide: A Step-by-Step Guide to Hiring
Independent Contractors in Washington State on the
web at Lni.wa.gov/go/F101-063-000 or contact L&I’s
Employer Services Help Line at 360-902-4817.
Definition of a Worker
For purposes of workers’ compensation coverage, a
worker is dened as follows within RCW 51.08.180.
“Worker” means every person in this state who
is engaged in the employment of an employer
under this title, whether by way of manual
labor or otherwise in the course of his or her
employment; also every person in this state
who is engaged in the employment of or who
is working under an independent contract, the
essence of which is his or her personal labor for
an employer under this title, whether by way of
manual labor or otherwise, in the course of his
or her employment, or as an exception to the
denition of worker, a person is not a worker if
he or she meets the tests set forth in subsections
(1) through (6) of RCW 51.08.195 or the separate
tests set forth in RCW 51.08.181 for work
performed that requires registration under
Chapter 18.27 RCW or licensing under Chapter
19.28 RCW: PROVIDED, That a person is not a
worker for the purpose of this title, with respect
to his or her activities attendant to operating
a truck which he or she owns, and which is
leased to a common or contract carrier.
To refer to the RCWs noted above, go to
Lni.wa.gov/rulemaking-activity. If you have
any questions about whether your employee
is dened as a “worker” for the purpose of
workers’ compensation coverage, refer to L&I’s
Independent Contractor Guide: A Step-by-Step Guide
to Hiring Independent Contractors in Washington
State on the web at Lni.wa.gov/go/F101-063-000 or
contact L&I’s Employer Services Help Line
at360-902-4817.
27
Appendix B
Out-of-State Workers
When workers travel across state lines, it
is important to know what states’ rules
apply for workers’ compensation coverage.
RCW 51.12.120 covers these “extraterritorial” laws.
Typically, a Washington worker:
Regularly works at your Washington place
of business.
Lives and works a substantial amount of
time in Washington.
Was hired in Washington.
Was hired to work exclusively in the state
of Washington.
A worker is generally considered an out-of-state
worker when:
You have a place of business in another
state or Canadian province and the worker
regularly works at that business location.
The worker lives and works a substantial
amount of time in another state or
Canadian province.
The worker was hired to work exclusively in
some other state or Canadian province.
Exceptions:
Workers who are not addressed by any of the
situations above or who are hired to work
exclusively outside the U.S. or Canada are
Washington workers if you sign the contract
of hire with them in the State of Washington.
Washington workers with duties in
Washington and at least one other state may
enter into coverage agreements with their
employer and an out-of-state insurer declaring
another state their home state for workers’
compensation. A signed coverage agreement
relieves the employer of any premium
obligation to L&I and ensures L&I will no
longer cover the work for on-the-job injuries.
-
Note: This option is not available if the
work performed in Washington requires
registration as a contractor or electrical
license to perform.
For Washington workers sent temporarily
out of state to work, Washington’s workers’
compensation coverage is extended to these
Washington workers while working temporarily
out of state as long as the work doesn’t fall under
federal jurisdiction. Federal jurisdiction includes:
Maritime-related activities (see RCW 51.12.100).
Maintenance or stevedoring at commercial
piers and harbors.
Building or repairing commercial vessels.
Contractors working on U.S. overseas
military bases (see RCW 51.12.060).
Working overseas under contract with
the Department of Defense or other
security agencies.
Railway employees (see RCW 51.12.080).
Note: If you have questions about whether work
is under federal jurisdiction, contact the United
States Department of Labor at dol.gov.
Even though Washington workers working
temporarily outside of Washington are covered by
your L&I policy, the other state or province may
require these same workers to be covered under the
laws of the state or province where they are working.
Appendix B
28
Questions on extraterritorial laws or
out-of-state coverage? See our website
at Lni.wa.gov/OutofState or email
OutofState@Lni.wa.gov.
Reciprocal agreements with other states
Reciprocal agreements designate coverage under
the laws of the worker’s home state when working
temporarily in the other state. The agreements
vary in the extent this coverage is permitted;
agreements with Montana and Nevada do not
include construction work.
Washington State has signed reciprocal
agreements with eight states:
Oregon.
Idaho.
Montana.
North Dakota.
South Dakota.
Wyoming.
Nevada.
Utah.
These agreements are in WAC 296-17-31009.
When sending Washington workers temporarily
out of state:
Request an “Extraterritorial Coverage
Certicate” by calling our Employer Services
Help Line at 360-902-4817. This Certicates
states that your Washington workers’
compensation coverage and benets will
extend to your Washington workers while
working temporarily out of state.
Other states may not always accept our
coverage for work performed in their state.
You should always verify with the state
your workers are traveling to that you are
in compliance with all of their worker’s
compensation, safety, licensing and other laws.
29
Appendix C
This information is provided as a quick reference guide. While we make every effort to ensure it is correct,
it is not intended to replace L&I’s or the insured’s policies, procedures, RCWs or WACs in their entirety.
Responsibility for
Independent Contractors
All businesses
If you enter into a contract with an independent
contractor, you may be required to provide workers’
compensation insurance coverage during the period
of the contract. You must cover the contractor if they
are a worker as dened in the workers’ compensation
laws. That denition (see Appendix A) includes
workers “…working under an independent contract,
the essence of which is his or her personal labor.”
Not understanding your requirements can
leave your business vulnerable to unexpected
premiums, penalties and even lawsuits from
independent contractors and their employees.
RCW 51.08.195 gives an employer an alternative
six-part test to determine if an independent
contractor is exempt from mandatory workers’
compensation coverage and other requirements,
such as unemployment tax.
The six-part test states that a person is exempt if:
1. They are free from control or direction over the
performance of the services, and
2. The service provided is outside the usual
course of business or it is performed
outside all of the places of business of the
hiring enterprise or the hired individual is
responsible, both under the contract and in fact,
for the costs of the principal place of business
from which the service is performed, and
3. The individual is engaged in an independently
established trade of the same nature as the
contract, or the individual has a principle place of
business eligible for IRS business deduction, and
4. The individual is responsible for ling a
schedule of expense and income with the IRS
for the business, and
5. Has an active account with the Department of
Revenue and other state agencies, as required,
for the business they are conducting under
the contract, and an active unied business
identier number (UBI) with the State of
Washington, and
6. The individual maintains a separate set of
books and records that reect items of income
and expense for the business.
Additional responsibilities for
construction and electrical contractors
If you are a construction or electrical contractor,
you must follow the six-part test above and
apply a seventh part to determine whether an
individual is exempt from mandatory coverage.
(See RCW 51.08.181.)
7. The individual must have a valid contractor
registration pursuant to Chapter 18.27 RCW
or an electrical contractor license pursuant to
Chapter 19.28 RCW.
Questions on Independent Contractor status and
liability for workers’ compensation reporting?
Contact the Workers’ Compensation Coverage
Determinations Unit at 360-902-6868 or email
Determinations@Lni.wa.gov
Appendix C
30
Liability for Unpaid Workers’
Compensation Premiums
You might have to pay someone else’s
workers’ comp premiums
In the construction industry, you can protect
yourself from liability for your subcontractor’s
unpaid premiums by ensuring ALL of the
following requirements are met:
You, the prime contractor, and your
subcontractor(s) are registered as contractors
under Chapter 18.27 RCW or licensed under
Chapter 19.28 RCW.
Your contracted work is the work of a
contractor as described in RCW 18.27.010.
Your subcontractor maintains a set of books
and records that reect all of the business’s
income and expenses. (You need to review
them for your protection.)
Your subcontractor works out of their own
storefront location or home ofce that is used
regularly and exclusively for the business and is
eligible for an IRS business deduction. (You need
to visit the place of business and make sure.)
You are not supervising your subcontractor
or their own employees. (See Independent
Contractor Guide: A Step-by-Step Guide to Hiring
Independent Contractors in Washington State on
the web at Lni.wa.gov/go/F101-063-000.)
Your subcontractor has a workers’
compensation account in good standing with
L&I,* or is certied by L&I as self-insured.
-
You must verify this when you hire a
subcontractor and each year by checking their
“Certicate of Workers’ Compensation
Coverage” at Lni.wa.gov/Verif y. Print it
and keep it on le, then remember to check
it again a year later.
-
You may also ll out a “Subcontractor
Tracking Request” online for your
subcontractor, and L&I will notify you
if your subcontractor falls behind on
workers’ compensation requirements.
* If your subcontractor is a sole proprietor who
meets all the above requirements but does not have
employees, they are not required to have a workers’
compensation account.
You must ensure that all of the above requirements
are met to receive protection from liability for your
subcontractor’s unpaid premiums.
Note: You should also verify that an independent
contractor or subcontractor you are hiring has an
active Department of Revenue tax registration
account. Find out at dor.wa.gov.
IMPORTANT NOTE:
Contractors should be aware that, under workers’ compensation law (Chapter 51.12 RCW), it is unlawful for any
county, city or town to issue a construction building permit to any person who has not submitted an estimate of
payroll to L&I and paid the required premiums. If the person qualifies for self-insurance, they must show proof of
self-insurance certification before a permit can be granted.
31
Appendix D
Certificate of Coverage
SAMPLE
Appendix D
32
Workers’ Compensation Rate Notice
SAMPLE
Appendix D
35
L&I Web Addresses
L&I’s main website: Lni.wa.gov
Website for the Insurance Services
Division of L&I: Lni.wa.gov/
WorkersCompAccount
Online text of Washington State Industrial
Insurance Laws (Title 51):
Lni.wa.gov/rulemaking-activity
File quarterly reports online:
Lni.wa.gov/QuarterlyReports
Report fraud: Lni.wa.gov/Fraud
Online Claim and Account Center:
Lni.wa.gov/ClaimInfo
Check out Business.wa.gov for helpful information,
links to valuable resources, and steps for starting
and operating a business in Washington State.
L&I Service Locations
Visit Lni.wa.gov/Ofces for a list of service
locations throughout Washington State.
Toll-free Numbers
Automated claims information:
1-800-831-5227
An automated telephone system that answers
common claim-related information for injured
workers, employers and medical providers.
Ofce of Information and Assistance:
1-800-547-8367
Serves as a central point of contact in
Labor & Industries. Customer service
representatives answer general questions
about workers’ compensation, workplace
safety and health and other L&I services.
Safety and health information line:
1-800-423-7233
Provides a menu of options callers can use to
request safety and health rules, learn about
“right to know” billing, obtain information on
ergonomics, and more. To make a workplace-
related safety and health complaint, please
call the L&I ofce nearest you.
Provider line: 1-800-848-0811
Service providers involved in the care
and treatment of injured workers use this
number to obtain authorization for services
and answers to billing questions.
Report fraud: 1-888-811-5974
Use this number to report contractor,
employer, workers’ compensation or medical
provider fraud.
Report a workplace fatality, in-patient
hospitalization, amputation or loss of eye(s):
1-800-423-7233
Upon request, language support and formats for persons with
disabilities are available. Call 1-800-547-8367. TDD users,
call 711. L&I is an equal opportunity employer.
PUBLICATION F101-002-000 [06-2024]
