2021 Workers’ Comp Cost of Living Increase in Washington (A Record High Increase)

Cost of Living Increase 2021Effective July 1, 2021, the Department of Labor & Industries (L&I) will apply a 10.1 percent cost-of-living increase to time-loss, pension, and loss-of-earning power benefits. This is the single largest year-over-year increase in the average wage in Washington in recorded history.

2021-2022: Cost-of-Living Adjustment (COLA) and Workers’ Comp Benefits

The cost-of-living adjustments help to ensure that your workers’ comp benefits will keep up with inflation.  The Washington State Department of Labor & Industries (L&I) is set to release the workers’ comp benefits schedule for 2021-2022.  Here are five key things to know about cost-of-living-adjustments (COLA): 

  1. Washington’s Average Annual Wage Was Up 10.1 Percent Last Year: Average wages continue to rise in Washington as announced by the Washington State Employment Security Department (ESD). In 2019-2020, the average weekly wage jumped 6.7 percent to $1,340. That was the biggest increase in more than 20 years. Last year, the average weekly wage jumped even faster, rising by 10.1 percent. The average wage in Washington is now $1,475 per week ($76,741 per year). 
  2. The COVID-19 Pandemic Was Likely a Significant Factor in the Increase: State regulators believe that the pandemic was a major driving factor in the increase. As emphasized by the Washington ESD, “COVID-19 has had profound effects on the Washington labor market.” Approximately half of the total wage increase was driven by workers actually earning more money. However, the ESD notes that the other half of the increase was driven by workers dropping out of the labor market. As the COVID-19 pandemic and the related government shutdowns disproportionately affected lower wage workers, the average wages increased. 
  3. The Average Wage Is Used to Calculate Workers’ Comp and Unemployment Benefits: The change in average wage is important because the figures are used to calculate both workers’ compensation benefits and unemployment benefits. Injured workers who are already receiving time-loss benefits, loss of earning power benefits (LEP), or pension benefits are entitled to a cost-of-living adjustment (COLA) to ensure that they are not falling behind. L&I is expected to apply a COLA adjustment proportional to the increase in average weekly wages. 
  4. You May Not Qualify for a COLA Adjustment Yet: It is important to clarify that not all people who are currently receiving workers’ comp benefits in Washington will get a cost-of-living increase this summer. Under RCW 51.32.075 (4), injured workers will only start receiving a COLA increase on “the second July 1st following the date of injury or occupational disease manifestation.” If you are receiving workers’ comp for the first time this year, your time-loss benefits, LEP compensation, or pension benefits will not increase to adjust for cost-of-living until July 1, 2022. 
  5. No Action is Required to Benefit from COLA Increase: If you are entitled to a cost-of-living increase for your workers’ compensation benefits, you do not need to file paperwork or take any other action to get the adjustment. Pursuant to state regulations, self-insured employers are supposed to apply the appropriate COLA adjustment automatically. If you believe that you were denied a cost-of-living increase in error, you should not hesitate to check with your attorney, employer, insurance company, claims manager, or Labor & Industries. 

If you have specific questions about cost-of-living adjustments and workers’ comp benefits in Washington, we are more than happy to help. 

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At The Walthew Law Firm, our workers’ compensation attorneys are highly skilled, passionate advocates for workers and their loved ones. For a no cost, no obligation review of your case, please give us a call or contact us directly online. With an office in Seattle and an office in Everett, we provide workers’ compensation representation throughout the area, including in King County, Pierce County, Snohomish County, Kitsap County, and Pierce County.