Washington Workers’ Compensation Benefits to Increase 3.5 Percent

Workers currently receiving Washington workers’ compensation wage-replacement or pension benefits will receive a 3.5 percent cost-of-living increase. State law requires that benefits be recalculated each July 1 to reflect the change in the state’s average wage from the previous calendar year.

Also increasing will be the amount Labor and Industries pays for a permanent partial disability (PPD). That annual increase is based on the change in the consumer price index from one year to the next. Effective tomorrow, PPD awards will rise 3.52 percent for workplace injuries incurred July 1 and beyond. PPD awards go to workers who have lost a body part or suffered a permanent, disabling injury.

Under Washington’s system, injured workers receive from 60 to 75 percent of their income, up to the legally set maximum, tax free, while they are off the job and recovering. The percentage of income is based on their marital status and number of dependents. For workers injured in 2005, the average monthly time-loss paid was just more than $1,640.

The annual recalculation of benefits is based on the average annual wage of all workers in Washington. That wage – calculated by the Employment Security Department – rose to $40,385 in 2005, an increase of 3.5 percent from $39,038 in 2004.

As a result, the new maximum monthly benefit will be $4,038.50, or 120 percent of the state’s average monthly wage, for workers injured after June 30, 1996. Only 4 percent of L&I claimants receiving wage-replacement benefits collect the maximum dollar amount.

Maximum benefits differ depending on when an injury occurred because, over the past decade, the state Legislature has increased the percentage of the state’s average wage used to set the maximum benefit level.

Time-loss benefits partially compensate workers for lost wages due to a job-related injury or illness. Pension benefits are paid when a work-related injury or illness causes a worker to be totally permanently disabled. Pensions also are paid to a worker’s surviving spouse and dependent children when a workplace accident or illness results in death.

The July 1 increase applies to both State Fund and self-insured employers. Labor and Industries manages the State Fund, which insures about 2.3 million workers for 168,000 employers. Another 830,000 workers are employed by companies that self-insure.