Workers’ compensation is a form of no-fault insurance that provides wage replacement and medical benefits to employees who suffer injury or illness in the course of employment. Each state maintains a separate workers’ compensation system. The US Department of Labor has put together a quick reference guide to workers’ compensation offices across the nation.

The workers’ compensation system is designed to cover approved medical, hospital and related services due to workplace injuries or illnesses, as well as compensate employees who are temporarily unable to work full-time. Employers must provide coverage for their employees, and in return employers normally cannot be sued for damages when a work-related injury or illness occurs.

The Washington state workers’ compensation system is unusual. Washington was one of the first states to implement a workers’ compensation system, and is currently one of only four states that has a monopoly state fund to provide workers’ compensation insurance.

Unlike non-monopoly states, where employers can purchase private insurance, Washington employers must obtain coverage through the Department of Labor & Industries. The agency manages and pays benefits out of an insurance pool called the Washington State Fund. The Fund is financed by premiums paid by employers and employees through payroll deduction. The Department sets premium rates each year; rates increased by 12% in 2011. Increases in 2012 and beyond are expected to be higher, as underlying medical care, pension and claim costs continue to rise.

The Department also requires employers to report serious workplace accidents or injuries. In cases of death, probable death or in-patient hospitalizations, employers have only eight hours to report the injury.

Employers seeking additional information on the workers’ compensation system should consult the Department of Labor & Industries information page.

For more information on compliance with the Washington workers’ compensation system, please contact Foster Pepper’s Employment and Labor Relations Practice Group.