The Building Industry Association of Washington recently joined a broad coalition of employer organizations weighing in on the Washington State Department of Labor & Industries (L&I) proposed workers’ compensation rates for 2027.

While the proposed statewide rate increase of 4.9% and the construction industry increase of about 3% may seem manageable, they mask the underlying challenges driving costs in Washington's workers' compensation system.

What’s hiding behind this modest workers' comp rate increase?

The coalition neither supported nor opposed the proposed rate increase. Instead, they focused on what those numbers reveal about the long-term health of the system.

L&I admits the proposed rates are well below the cost of operating the system according to actuaries. Washington's workers' compensation program has relied on reserve funds for multiple years to bridge the gap between premium collections and actual system costs.

Modest annual rate increases may help avoid sticker shock for employers, but they hide the factors that continue pushing claim costs higher.

Why do workers’ comp claims costs continue to rise?

For BIAW and ROII, the most important measure of success is whether injured workers receive the support they need to recover and return to productive employment safely and quickly so they can get their lives back.

Washington’s seeing a troubling trend: Injured workers are remaining on time-loss significantly longer than in previous years. As the length of a workers’ comp claim increases, costs rise for employers, workers lose valuable connections to the workplace and the likelihood of permanent disability grows. Nobody wins.

Every worker who successfully returns to work represents a better outcome for everyone involved. Workers gain income, skills, better mental health and strong workplace relationships. Employers retain experienced employees and stable workforces. The workers' compensation system avoids long-term costs that ultimately drive premiums higher.

How do we protect the tools that help workers recover from workplace injuries?

Washington employers, including BIAW members, have invested heavily in return-to-work programs, light-duty opportunities, workplace accommodations and safety initiatives designed to help injured employees recover and rejoin the workforce. Nobody wants to lose a valuable employer to a workplace injury.

Unfortunately, legislative and regulatory changes have increasingly limited the tools employers, claims managers and medical professionals need to resolve claims efficiently and support recovery. At the same time, trial attorneys and other stakeholders continue pushing for policy changes that can extend claim duration and increase costs.

The result is a system of conflicting incentives. While employers and workers both benefit from successful recovery and return-to-work outcomes, others have their own incentives and the power and influence to change labor policy in their favor.

Why this matters to home builders

Washington's workers' compensation system should balance two critical objectives:

• Providing strong protections for injured workers,
• While encouraging recovery and return to meaningful employment whenever medically appropriate.

Home builders understand the importance of workplace safety. The residential construction industry has invested millions of dollars in safety training, education and accident prevention efforts. ROII works closely with members every day to reduce injuries, control claim costs and most importantly, help injured employees return to work safely.

When the system works, workers recover faster, employers face lower costs and communities benefit from a stronger workforce. When claims remain open for years and transition into long-term disability, everyone loses.

Continuing the conversation

BIAW and its coalition partners appreciate L&I's willingness to engage with employers through the Workers' Compensation Advisory Committee and other stakeholder processes. However, meaningful reform requires an honest discussion of what drives costs and which policies best serve injured workers.

Washington's workers' compensation system exists to help injured workers heal, recover and return to productive employment so they can earn a good living to support themselves and their families.

L&I must increase transparency about how policy decisions drive costs so lawmakers can make truly informed decisions in the best interest of all. They should also report the how much they are drawing from reserves each year, treat return to work as the system’s central measure of success and develop reforms to reduce long-term disability and pension claims.

Only then can workers’ comp truly fulfill its promise to help injured workers recover from workplace injuries and return to the life they once had.

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