Workers’ Comp Premium Rate Directly Tied
By Robert T. Nelson, Labor and
Industries Public Affairs
Last year, as the Department of
Labor and Industries (L&I) prepared to hold rate hearings around the state, we
put together some examples of the different premium rates employers and workers
paid within various industries and risk classes. One of the examples was in the
residential wood-framing industry, and the disparity was stark. Within that
trade, contractors paid as little as 85 cents an hour and as much as $5.25. As
you can imagine, employers paying the lesser amount tended to view the cost of
industrial insurance differently than those paying at the upper end.
The same disparity exists in the
logging industry. This year, companies reporting in Risk Class 5001 are paying
between $4.19 and $16.58 an hour for workers’ compensation insurance. The higher
of those two rates works out to be over $33,000 a year in premiums for each
full-time worker the company employs.
That’s four times what the company
with the low rate pays. Employers aren’t the only ones who suffer from the
higher rate. Washington is the only state in the nation where workers pay into
the industrial insurance system, so about a quarter of the premium can be passed
on to them. At the company with the lowest rate, workers contribute 66 cents an
hour to their insurance coverage. Workers at the company paying the highest rate
pay $2.57 an hour.
There’s no denying the dangers of
working in the logging industry. It was one of the original industries insured
when Washington’s workers’ compensation system was established in 1911, and
logging remains hazardous work. Injuries often are life altering, permanent and
expensive to treat, which is why the Logging Operations risk class has the
highest rates in our system.
But, as is illustrated above, that
expense is borne most heavily by companies with poor safety records and multiple
expensive injury claims that involve wage-replacement benefits, retraining and
pensions when a logger is injured so severely he or she will never work again.
Such injuries can be prevented, providing the employer understands the
connection between safety and the cost of industrial insurance and takes
For example, a claim stays on an
employer’s record for about three years. No matter how serious or costly the
injury, a claim only impacts an employer’s premiums for that period of time.
Emphasize safety and reduce injuries, and a bad experience factor can turn
around rather quickly. A few years ago, one of L&I’s safety consultants was at a
logging site and noticed several workers not wearing eye protection. The
consultant asked the foreman why safety glasses weren’t being worn and the
supervisor replied that it was hard to get workers to wear them because they
fogged up and were uncomfortable. "What would you do if that worker stole one of
your chain saws?" asked the L&I consultant. "I’d fire him," came the reply.
"Well, if that worker loses an eye, it’s going to cost you a whole lot more than
a chain saw," responded the consultant.
By the way, the Permanent Partial
Disability award for a lost eye is $37,087.18. And that amount doesn’t include
the medical and time-loss benefits that would have been paid during the worker’s
recovery. There was a time, not too long ago, when the timber industry averaged
300 to 500 eye injuries a year. That number declined with the advent of safety
glasses that don’t fog up.
Fatalities, too, have gone down as
the industry has gone through the cycle of logging second-growth trees on
flatter ground. The most common injury in logging is "Struck bys," as in workers
being struck by trees, limbs, snags, equipment, machinery and whatever else
happens to be tumbling by. Two years ago, Region 4 in Southwest Washington,
where most of the state’s logging occurs, began a safety consultation program
with landowners and contractors.
The program focuses on avoiding
"Struck bys." Since the program began, the number of "Struck bys" has dropped by
81 percent, and that decline in injuries has resulted in lower insurance
premiums for the companies that focused on safety. The consultations are free
and confidential. Hazards found will not be cited as long as the employer agrees
to correct them. If your company hasn’t had a safety consultation, you can
request one by calling Marcia Holt at (360) 902-5472 or go online at:
is an ever-changing environment. Stuff is moving all the time. Oftentimes, a
logger is working on a steep slope, and that is especially hazardous when the
logger is inexperienced. And the dangers will increase as the industry completes
its logging of second-growth timber on relatively flat land and moves to higher
The cycle of logging continues as
trees mature and are cut. But the cycle of devastating, life-altering injuries
doesn’t have to go on. Please do yourself and your workers a favor and take
advantage of the expert safety consultations L&I has to offer. Your workers and
their families, and your company’s bottom line, will benefit.
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