Washington State workers have been dealt a major blow after the Washington State Department of Labor and Industries (L&I) instituted reforms that will see them receive the lowest increase for worker’s compensation in 5 years.   The state agency proposed a 2.5 percent increase which is a significantly lower than the 10 to 14 percent which had been anticipated reforms.

Director of the agency, Judy Schurke, said that in arriving at the figure, her agency sort to strike the right balance between a sluggish economy and the employees welfare needs. She was confident that the new reforms would stand the test of time and yield results. The legislative reforms are part of the state’s cost-cutting measures that seek to reduce national deficit and are expected to save the state approximately $1.1 billion four years down the road. In addition to this, the reforms will help Washington State eschew a double-digit workers’ compensation rate increase, which will go a long way in rekindling the diminishing state’s job market.

A statement issued by Christine Gregoire, Washington’s governor, said in part that the reforms were a shot in the arm for the job market, harmonize the rates and create a more efficient claims settlement system.  L&I has used up $332 million from the State Fund reserve since 2007 to partially compensate for workers and employers premiums in a bid to keep the rates from going through the roof during the economic turmoil. This has depleted the reserves to levels well below the industry minimum level. According to Schurke, the new reforms will address this issue and bolster the reserves. According to official reports, for the past three years, L&I has been adopting lower than the required rates. In 2008, the increase was 3.2 percent increase, 3.1 percent in 2009, 7.6 percent next year and a double digit rate, 12 percent, in 2011.

-Mike

Michael E. Dortch
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