Washington Workers Compensation

Washington workers compensation coverage plays an important role in helping businesses handle work-related injuries and illnesses. Washington requires that employers obtain workers compensation coverage through a state-run system or self-insure if they qualify. Employers in WA that self-insure can find important workers compensation requirements information here and how a third-party administrator (TPA) may help.

Understanding workers compensation in Washington

The verdant state of Washington contains several climate zones along with many major types of industries. From logistics to manufacturing to tech hubs, a wide span of businesses (many of them in Seattle) call the state of Washington home. Regardless of the type of industry or job held, most employers need protection should an accident happen on the job.

Washington has implemented employer-mandated workers compensation insurance to protect employees, administered by the Department of Labor & Industries (L&I). For eligible self-insurers, Travelers can bring an extra layer of support through our affiliate Constitution State Services (CSS). With customizable claim services and industry benchmarking, CSS can give Washington businesses a full-service workers comp third-party administrator (TPA) offering.

Who is required to carry workers compensation insurance in Washington?

Employers in Washington must carry workers compensation insurance. Coverage can be purchased through the Washington State Fund, which is operated by the Department of Labor & Industries (L&I), or obtained by pursuing self-insurance, an option selected by roughly 25% of employers who meet the qualifying criteria. This ensures all employees are protected if they’re injured on the job.

Washington requirements to consider

Failure to provide required workers compensation insurance can expose employers to severe consequences, including civil liability for employee work-related injury costs, criminal charges and penalties, monetary fines, and stop-work orders.
In Washington, unlike every other state, most workers compensation insurance risk classifications and premiums are based on hours worked instead of payroll.
Employers should be aware that state-issued workers compensation policies do not include employer liability insurance, which provides coverage for lawsuits filed by employees for work-related injuries. Employers liability insurance coverage can be secured separately by an employer with an employers liability (stop gap) coverage from private insurers such as Travelers.

The role of third-party administrators (TPAs) in monopolistic states

In Washington, the Department of Labor & Industries (L&I) is the exclusive provider of workers compensation insurance. However, businesses that qualify and elect to self-insure can contract with a third-party administrator (TPA) to manage their claims. A TPA such as the Travelers affiliate – Constitution State Services (CSS) – can help better serve employees through the claim process and manage employer costs more effectively.

How using CSS as a TPA can help businesses in Washington

Stability, expertise and experience: Dedicated Claim professionals help provide optimal employee and employer outcomes.
Data and analytics: Customizable industry benchmarking dashboard for effective risk management.
Solutions for managing severity: Advanced predictive models that identify outliers sooner for quicker intervention.
Investigation and fraud prevention: Our industry-leading investigators work with Claim professionals to detect, investigate and deter fraudulent activity.
Resources for injured employees: Personalized support with virtual visits and nurse case management.

Overview of workers compensation requirements in the state of Washington

Understanding Washington workers compensation is essential for employers. Being aware of state requirements helps employers comply with the law and support employees. This is an overview of the fundamentals of employer responsibilities and the benefits employees may receive under WA workers compensation law.

Washington state workers compensation employer responsibilities overview

Compensable injuries

Generally, injuries arising out of and in the course of employment, regardless of whose fault it is, have potential for workers compensation benefits. This includes occupational diseases and cumulative trauma injuries.

Occupational diseases and cumulative trauma injuries caused by work exposure or repetitive activities are eligible for the same medical and wage replacement benefits as acute injuries.
- Permanent disability ratings may also be assigned based on severity.

Posting notices

Self-insured employers and Washington State Fund employers must display respective Department of Labor & Industries’ official “Notice to Employees” posters, available in English and Spanish, in visible, easily accessible areas for employees.

These posters explain employee workers compensation rights, medical care options and claim filing procedures.

Providing medical treatment 

Employers cannot choose the medical provider.

Injured employees may choose any medical provider who is a member of the Washington State Department of Labor & Industries’ (L&I) medical provider network.
Employers are required to post notices informing employees of their right to receive treatment from L&I-approved providers.

Providing lost wages (indemnity) 

Employers can be responsible for lost wages, including decrease in pay due to modified job responsibilities. The employee benefits section gives a more in-depth explanation of the types of wage benefits employers may be responsible for.

Prompt reporting and forms

Employers should encourage employees to promptly notify them of any accident or injury. Once aware of a work-related injury, the employer should make sure the injured employee understands they can seek medical treatment if needed.

Employers must report all work-related injuries and illnesses in the manner and within the time set forth by law.

Employers may also be asked to provide payroll information and the amount they contribute to their employee’s health benefits to help calculate lost-wage benefits.
Timely and accurate submission of these forms is essential for effective claim management and regulatory compliance.
Maintaining accurate, timely records helps ensure claims are handled properly, and premiums remain fair.

Prompt reporting is essential to avoid penalties and provide timely benefits for injured employees.

Record keeping

Employers should maintain thorough documentation, including details about what happened, when, where, and witnesses involved. Accurate record keeping and prompt reporting to the Department of Labor & Industries (L&I) can play a key role in a timely and complete investigation and handling of the claim.

The employer should continue to maintain and provide necessary information to L&I as well as their third-party administrator (if self-insured) throughout the claim process as it is vital for efficient claim handling and compliance with the workers compensation law.

Penalties

Employers may face penalties for late reporting, uninsured employment, discrimination, or failure to maintain required records and forms.

Washington workers compensation employee benefits overview

Time-loss compensation wage replacement in Washington

If the Department of Labor & Industries-approved doctor has certified that an employee is unable to work, they may receive a portion of lost wages called “time-loss compensation.”

Time-loss compensation payments are lower than an employee’s regular paycheck.
Time-loss compensation calculations are based on the injured employee’s gross wage, family status and number of dependent children at the time of injury or manifestation of occupational disease. If the worker had a second job at the time of injury, the income from this source must also be included when computing gross monthly wages.

Temporary Total Disability (TTD) benefits

Temporary Total Disability (TTD) benefits begin after a 3-day waiting period, which is retroactively paid if the worker is hospitalized or remains disabled for 7 consecutive days. The benefit amount is 60% to 75% of the injured employee's total wages and other eligible earnings, depending on their family status and number of dependents at the time of the injury.

Subject to minimum and maximum state rates.

Loss of Earning Power (LEP) benefits

Loss of Earning Power (LEP) benefits may apply when an injured employee returns to work with reduced hours or lower wages due to a work-related injury or illness.

These benefits compensate for the difference between the employee’s pre-injury wages and post-injury earnings, provided the loss exceeds 5%.
Medical documentation is required to establish that the reduction in earnings is directly related to the work injury or illness.
Subject to minimum and maximum state rates.

Permanent Partial Disability (PPD) benefits

Permanent Partial Disability (PPD) benefits are paid when an employee reaches Maximum Medical Improvement (MMI) and has a permanent impairment from a work injury.

A Washington State Department of Labor & Industries-approved physician evaluates the employee to determine the impairment rating based on state guidelines.
The amount of benefits owed for the applicable percentage is based on the date of injury. The state updates the PPD guidelines annually.

Permanent Total Disability (PTD) benefits

Permanent Total Disability (PTD) benefits are paid when a work-related injury leaves an employee permanently and totally disabled, preventing any return to gainful employment.

Eligibility is determined through medical and vocational evaluations, or by meeting specific automatic qualifying conditions such as the loss of multiple limbs or total blindness.
Benefits are based upon the Temporary Total Disability (TTD) rate with offsets for Social Security (if applicable).
Subject to minimum and maximum state rates.

Fatality benefit

Fatality benefits are paid when an employee dies from a work-related injury or illness.

Where death results from an injury or illness, burial expenses are not to exceed 200% of the average monthly wage in the state.
Surviving spouses of a deceased employee eligible for benefits shall receive monthly benefits at the percentage of the deceased employee’s wages as set forth by statute for life or until remarriage. Surviving minor children may be eligible for death benefits in some instances.

Vocational retraining

Employees qualify for vocational retraining if it is necessary and likely to help the employee return to gainful employment.

Evaluation is required if the injured employee is unable to return to their job or a permanent modified position. If qualified, the employee has the following two options:

Option 1: the employee participates in the approved vocational plan developed for them.
Option 2: the employee declines the formal retraining plan and for payment of 9 months of time loss, and they maintain access to retraining funds for 5 years.
- A worker who elects option 2 benefits is not entitled to further Temporary Total Disability (TTD) or Permanent Total Disability (PTD) benefits except upon a showing of a worsening in the condition or conditions accepted under the claim such that claim closure is not appropriate.

Medical benefits

Employers must fully cover all reasonable and necessary medical treatment for work-related injuries, including emergency care, follow-ups, prescriptions, therapy and durable medical equipment.

Injured workers may choose any provider within the Washington State Department of Labor & Industries’ medical provider network, except during emergencies.
All approved medical costs are covered with no out-of-pocket expenses, subject to the state medical fee schedule.

Legislative updates

Regulations, laws and potential changes that can shift your course

As the nation’s largest writer of workers compensation insurance, Travelers is committed to understanding new and evolving legislation, regulations and trends at the state level. Our employees serve on regional and national associations, boards and committees to advocate on behalf of our customers and the industry. We educate stakeholders on the impact legislation can have on businesses. By taking an active role in the legislative process, we participate in the important dialog around worker safety and advocate for best practices industry-wide so all can benefit from our workers compensation expertise.

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Constitution State Services

Third-Party Administration (TPA) workers compensation claim services

Travelers affiliate Constitution State Services (CSS) Claim professionals bring the stability and expertise needed to deliver optimal workers compensation outcomes.

Every injured employee receives a personalized recovery experience.

Dedicated Claim professionals integrate with business teams to accurately understand organizational needs.

Capabilities are aligned to the unique demands of a business – meaning businesses only pay for the services chosen.

Industry-leading practices and resources help contain claim costs.

Explore CSS

Information for Washington businesses

Resources

Constitution State Services (a TPA affiliate of The Travelers Companies, Inc.)

Travelers workers compensation hub

Travelers workers compensation claim process

TravPay®/Pay-as-you-go billing

Premium Audit

Risk Management Information Services (RMIS)

Travelers Risk Control

Government links

Washington State Department of Labor & Industries (L&I)

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Sources
https://lni.wa.gov/insurance/