Washington state employers got an early gift this year with the news that workers’ comp premiums will go down by an average of 5% in 2019. What one state department giveth, however, another may taketh away. That’s because the new Paid Family & Medical Leave law also goes into effect in the New Year, while minimum wages are also going up statewide, with bigger increases in Seattle, Tacoma, and other cities.

Here’s a look at the major changes affecting Washington state employers for 2019:

Workers’ Comp Rates Go Down

Employers are set to see workers’ comp rates decrease by an average of $58 per employee in 2019, according to a press release from the Department of Labor and Industries. That’s great news, just remember that the actual rates your company pays are decided by two key factors:

  1. Type of work performed by your employees (risk classes)
  2. Cost of your workers’ comp claims in recent years (experience modification rate or EMR)

At Approach, our focus is keeping your EMR as low as possible, because this is the multiplier used to set the premium rate for your company.

Each employer should have a notification from L&I regarding 2019 rates. Contact your Approach retro coordinator if you have questions about your rates or how to read the notification.

Paid Leave Begins

On January 1, 2019, Washington state will begin collecting premiums for the new Paid Family & Medical Leave law and nearly every employer in Washington state is affected.

Starting January 1, 2019, each employer in Washington must:

  • Calculate 0.4% of each employees gross wages (wages x .004)
  • Decide how much of the premium will be taken from employee wages, from 0% up to 63.33%
  • Report wages and premiums to the Employment Security Department

Plus:

  • Companies that average 50 employees or more must pay the remaining premium, at least 33.667% of the amount due for each employee
  • Companies with less than 50 employees do not have to pay this employee portion, but still have to file a report with Employment Security Department

Learn more in our deep-dive blog on Paid Leave in Washington from November or watch the recording of our Washington Paid Leave webinar with representatives from the Employment Security Department.

Minimum Wage Increases

Federal minimum wage does not apply to most workplaces in Washington state and employers must generally pay Washington state minimum wage. Three cities in Washington state have their own minimum wage, which is again higher than the state. Here’s a quick look at the basic minimums, but be sure you are paying the appropriate wage based on your specific organization and workforce.

2019 Washington State minimum wage

  • $12.00 for 2019 (4.2% increase)
  • In 2020, the state minimum wage will take a big jump to $13.50

2019 Seattle minimum wage

  • $16 for large employers (500+ employees) in 2019
  • $12 or $15 for small employers
    • The lower rate is for employers that provide health care coverage to their employees

2019 Tacoma minimum wage

  • $12.35 for 2019
  • Going forward, minimum wage will be set annually in Tacoma based on the rate of inflation

2019 SeaTac minimum wage

  • $16.09 for transportation and hospitality workers in 2019

Again, if in doubt, consult your attorney or an HR professional. Approach clients can submit general questions to the All Things HR Help Desk using the client portal.

For the average Washington employer, savings of 5% on workers’ comp in 2019 will be just about offset by a new 0.4% premium on wages, plus a 4.1% increase to the statewide minimum wage. Of each of these, workers’ comp is the one area where you have some control. Be proactive and contact us to schedule your annual safety visit.