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Like most U.S. states, Washington requires most employers to have workers’ compensation insurance. If you’re about to open your business or hire your first employees, learning about workers’ compensation requirements in Washington can help you secure coverage and avoid legal penalties.
Like other types of small business insurance, workers’ comp is a good thing for employers and employees alike. It helps protect your workers’ livelihoods and it safeguards your business from financial loss in the event of workplace injuries.
In this article, we’ll explore the rules and regulations surrounding workers’ compensation insurance in Washington.
How does workers’ compensation insurance in Washington work?
As a Washington state employer, you must provide workers’ compensation coverage for any of your employees unless they meet the state’s exemption rules. For most businesses, this means that every employee (part-time or full-time) must be covered.
Unlike most states, Washington does not allow private workers’ compensation insurance. As an employer, you’ll purchase coverage by applying through the Washington State Department of Labor and Industries.
Some employers can qualify to become self-insurers. To qualify, you must be able to prove that your business has the financial resources (at least $25 million in assets), accident prevention measures, and an administration system sufficient to run your own workers’ compensation program.
Who needs workers’ compensation insurance in Washington?
While most employees in Washington need to be covered, there are some employee types that are exempt. As an employer, you may not have to provide coverage for the following workers:
- Domestic workers in private homes
- Workers performing gardening, maintenance, or repairs in private homes
- Casual laborers
- Individuals working for aid or sustenance from a charity or religious organization
- Agricultural workers under the age of 18 who work for their parent
- Horse jockeys
- Newspaper delivery people
- Insurance producers
- Barbers or hair stylists who rent their workspace
- Commercial drivers
- Taxi and limousine drivers
Business owners, including sole proprietors and Limited Liability Corporation (LLC) partners, are not required to purchase coverage for themselves. However, that doesn’t mean that you can’t get coverage for yourself as a business owner.
What are the penalties for not having workers’ comp in Washington?
The state of Washington has a detailed penalty schedule for businesses that are non-compliant. Not having the required coverage, failure to make premium payments, and misrepresenting payroll can all result in penalties ranging from monetary fines to stop-work orders to felony charges. To see the entire range of penalties, visit the Washington State Legislature page.
What does workers’ comp cover?
One of the central aspects of workers’ compensation insurance is the coverage of medical costs for workers who get injured or become ill on the job. Covered costs can include ambulatory services, emergency room visits, surgery or operation costs, and prescription medicine.
For example, if you run a pet grooming business and one of your groomers is bitten by a client’s dog, they’ll likely need a trip to the ER and some stitches. If the bite is serious enough, their doctor could even prescribe pain management medication. In this event, workers’ comp could cover some or all of your employee’s medical costs.
In many cases, employees who get injured on the job need extra time to rest and heal before returning to work. While they’re at home, they can lose important income. Workers’ comp can provide them with lost wage coverage. In Washington, lost wage payments are known as time-loss compensation payments. Injured employees who miss more than three days of work can receive 60-75% of their gross wages.
In the pet grooming example above, say your injured worker was out of commission for 10 days before the doctor removed their stitches and cleared them for work. Workers’ compensation would cover their lost wages for seven out of the 10 working days lost.
Some workplace injuries are chronic conditions that build up over time. Spinal injuries, carpal tunnel syndrome, and vision and hearing loss are a few examples of long-term occupational injuries. These injuries might require ongoing medical services like physical therapy or pain management medication.
Workers’ compensation in Washington can cover ongoing care provided the injured worker goes receives the care through a provider in the Washington State of Labor & Industries (L&I) Provider Network.
If the unimaginable happens and one of your workers passes away after a workplace accident, their family can receive death benefits from your workers’ compensation policy.
In Washington, death benefits are awarded in the form of a monthly pension to the deceased worker’s surviving spouse or children. They also get a one-time settlement equal to 100% of Washington’s average monthly wage and funeral cost benefits equal to 200% of the average monthly wage. Spouses can lose monthly death benefits if they remarry.