Word today from the state Department of Labor & Industries that workers' compensation benefits will go up 3.4 percent beginning July 1 is surely welcome news for anyone receiving such benefits.
But for anyone who runs a business, it could be foreshadowing of a looming rise in workers' compensation tax rates.
It's not hard to predict that higher benefits will equal higher taxes.
In addition to the bump in wage-replacement benefits, the department announced a 4 percent rise in the amount it will pay out for a permanent partial disability.
In a press release, Labor & Industry officials characterize the benefit increases as cost-of-living raises. State law requires a yearly recalculation to reflect the change in the average wage from the previous calendar year.
That's fine. But the formula for calculating cost-of-living adjustments - which is based on the average annual wage of all workers in Washington - has resulted in unreasonable increases in recent years.
The timing of this increase - when the state unemployment rate stands at 9.4 percent - only underscores that point.
The "implicit price deflator" would make for a more reasonable formula, says Kris Tefft, AWB's general counsel and director of government affairs for employment law. Under this inflation-based figure, benefits would not have gone up at all this year. Even under the CPI for wage/clerical workers in Seattle, that index is in negative numbers in late 2008 and 2009.
It's something the Legislature ought to take a look at.
