L&I Claim & Work Injury Premiums: Amazon’s 15% Workers’ Comp Rate Incre – Workers Compensation Legal Blogs Posted by Tara Reck, Esq.
The Department of Labor and Industry (L&I) has decided to increase Amazon’s fulfillment warehouse accident insurance premiums by 15%. As a result, Amazon reportedly denies L & I’s basis for the rate hike. Personally, that’s nothing new. As always, premium rates are a contentious issue. The reason is simple: higher premiums increase the cost of doing business in Washington state.
Eligible for Workers Compensation in Washington State
In Washington State, the system of employee compensation claims is governed by the Industrial Insurance Act (RCW 51). This law describes the benefits for employees and their relatives in the event of an accident at work or occupational diseases that lead to disability or death. In general, L&I collects insurance premiums from employers and employees across the country in several funds. In return, L & I pays benefits to claimants for occupational accidents from these funds. In the case of self-insured employers, either the employer or the employee compensation insurance pays benefits to the injured employee.
Work injury insurance
In order to calculate fair premiums, L&I uses a multi-factor system to calculate the employer’s contribution. The aim is for the premiums to reflect the risk of injury to employees in their work environment. To achieve this goal, they compute employee compensation insurance rates based on three factors: (1) risk classification; (2) base interest rates; and (3) experience.
Risk classifications record the degree of danger or exposure to workers in the workplace. There are over 300 categories in this classification. Of course, employers with a more dangerous work environment pay higher L&I premiums. For example, the premiums for indoor office work are significantly lower compared to the premiums for the wood industry.
The calculation of the basic insurance rates also includes several factors. Each year L&I uses five years of L&I claim cost data to calculate the rates for each risk classification. Here L & I multiplies the experience factor for each company by the sum of the basic rates for accident funds, medical aid funds and accommodation costs. This value is added to the base interest rate of the additional pension fund. Any company that uses the L&I Work Injury Insurance Program must contribute to all four funds. The base rates for the first three funds vary depending on the risk classification. In addition, L&I companies will receive an annual tariff notification that summarizes coverage for the coming year in December each year.
Finally, L & I applies an adjustment of the experience factor to the base rates. The experience factor adjusts the base rate by comparing the actual experience of a company with all companies in the same risk classification. When a company’s actual losses are less than expected, L&I makes an adjustment to lower the premiums for that employer. Similarly, the empirical factor is greater when the actual losses are greater than the expected loss. In this case, the company is expected to have higher costs than the benchmark for its risk class.
Since it is December, L & I’s annual communications have just run out. So it is no coincidence that the Amazon story is in the news right now. Contrary to what the reports may imply, this surge should not point out or treat Amazon any differently than any other employer. In assessing Amazon’s fulfillment warehouse work environment, L & I only found that the risk classification warranted an adjustment. This type of adjustment always takes place when L & I determines that the current risk classification or experience assessment for each company is not compatible with the costs and injuries in the workplace.
Further information: https://tarareck.com/l-and-i-claim-insurance/
~ * ~ * ~ * ~ * ~ * ~ * ~ * ~ *
Ms. Tara Reck is the executive L&I attorney at Reck Law – Workers’ Compensation Attorneys in Washington State. If you would like further information, please contact Ms. Reck via:
* Seattle | Bellevue | Mercer Island Office: (206) 395-6141
* Tacoma Office: (253) 999-9828
* Renton office: (425) 800-8195
* Port Orchard Office: (360) 876-4123
* Email: [email protected]
* Your Workers’ Compensation blog at https://tarareck.com/contact/ or their company website at https://recklaw.com/contact/