Washington Workers Compensation Guide

Workers Compensation Requirements in Washington

Washington is a monopolistic workers' comp state — all employers must purchase coverage from the Washington State Department of Labor and Industries (L&I). Private insurance is not available for workers' comp in Washington. Washington allows large employers meeting financial requirements to self-insure. Washington has one of the more comprehensive workers' comp systems in the nation.

Workers Comp Rates in Washington

Workers compensation premiums in Washington are calculated on hours worked in each L&I risk class, adjusted by the employer's experience factor — not on payroll. The per-$100 figures below are payroll-equivalent estimates for comparison with other states only. The average rate of approximately $1.95 per $100 of payroll is a statewide blended average — actual rates vary significantly by job classification.

For example, an employer with $1 million in payroll at the average rate of $1.95 per $100 would pay approximately $19,500 annually before experience modification adjustments.

Average Workers Comp Rates by City in Washington

What Makes Washington Unique

Washington's L&I workers' comp program is one of the largest monopolistic state funds in the nation. Washington's system is notable for its vocational rehabilitation services, structured settlement provisions, and the Retrospective Rating Program (retro) that allows groups of employers to receive premium refunds based on claims performance. Washington also funds the Worker Retraining program for injured workers.

Washington Charges Workers’ Comp by the Hour, Not by Payroll

Washington is one of four states with a monopolistic state fund: unless an employer is approved to self-insure, coverage comes only from the Department of Labor & Industries (L&I). It is also the only state that prices workers’ comp by hours worked rather than per $100 of payroll. A rate is an amount per hour for each risk class, and employers report hours quarterly.

• Raises don’t raise premium. Because premium follows hours, a wage increase doesn’t automatically increase what you pay — which is also why Washington’s “rate per $100” comparisons with other states are misleading.
• Workers pay part of it. Employees contribute roughly 25% of the total premium through payroll deductions; employers pay about 75%. Washington is unusual in having a worker share at all.
• 2026 rates rose an average of 4.9%, about $1.37 more per week per full-time position; construction’s average increase was about 3%.

Why Washington Employers Still Need Stop-Gap Coverage

L&I’s policy pays workers’ comp benefits, but like other monopolistic state funds it does not include employer’s liability coverage — the part of a standard policy that defends the employer when an injured worker or a third party sues over the injury outside the comp system. In other states that coverage comes bundled; in Washington it has to be added, usually as a stop-gap endorsement on the general liability policy.

Contracts often require employer’s liability limits of $500,000 or $1 million. A Washington contractor that shows an L&I certificate but no stop-gap endorsement can fail a general contractor’s insurance review. The same issue applies to North Dakota, Ohio, and Wyoming — see our North Dakota guide for how stop-gap works.

Working Outside Washington

Monopolistic state funds generally don’t provide coverage in other states. A Washington employer sending employees to work in Oregon, Idaho, or elsewhere usually needs a separate private policy covering those states (often called other-states coverage). Check this before the first out-of-state job, not after an injury there.

Workers Comp Benefits in Washington

Washington provides temporary total disability at 60-75% of wages (depending on marital and dependent status). Medical benefits are comprehensive. Washington's vocational rehabilitation program is among the most developed in the nation.

Employee Rights in Washington

Washington workers can choose their own treating physician. Disputes are handled by the Board of Industrial Insurance Appeals with access to superior courts.

How Workers Comp Premiums Are Calculated in Washington

Workers compensation premiums in Washington follow a different formula from most states: Hours Worked × Hourly Rate for the Risk Class × Experience Factor = Premium, with roughly a quarter of the total withheld from workers’ pay.

How to Reduce Workers Comp Costs in Washington

Washington employers cannot shop for workers' comp but can significantly impact costs through safety performance and participation in retro programs. L&I retro programs allow groups of employers to receive premium refunds if their loss experience is favorable. Safety investments have direct impact on experience-rated premiums. Large employers should evaluate self-insurance eligibility.

• Washington operates a monopolistic state workers' comp fund, so pricing isn't competitive between private carriers here — your main lever for controlling cost is your experience modification rate (EMR), not shopping insurers.

Frequently Asked Questions

How are workers’ comp rates calculated in Washington?

Washington charges premium per hour worked in each risk class, not per $100 of payroll. Employers report hours quarterly to L&I, and employees pay roughly 25% of the premium through payroll deductions.

How much did Washington workers’ comp rates go up in 2026?

L&I’s average premium increased 4.9% for 2026, about $1.37 more per week per full-time position. Construction’s average increase was about 3%.

Do Washington employers need employer’s liability insurance?

L&I coverage does not include employer’s liability, so employers usually add stop-gap coverage as an endorsement to their general liability policy. Many contracts require it.

Can I buy workers’ comp from a private insurer in Washington?

No, except for approved self-insured employers. Washington is a monopolistic state fund state; coverage comes from the Department of Labor & Industries.

The information on this page is provided for general informational purposes only and reflects estimated industry averages and state requirements as of 2026. Workers compensation laws, rates, and requirements change frequently and vary significantly by employer size, industry, and job classification. Rate estimates shown are blended averages and do not represent actual quotes for any specific employer. Always consult a licensed workers' compensation insurance professional and your state's workers' compensation regulatory agency for current, employer-specific information.