Workers' comp laws in Washington
Every Washington employer with covered workers must carry workers' comp, with no minimum headcount. It is bought only from the state, through the Washington State Department of Labor & Industries (L&I), because private insurers cannot write it here. What marks Washington out is the price: a set rate per hour worked, not a percentage of payroll.
- Only the state fund at L&I sells it, or you qualify to self-insure. No private insurer can write it here.
- You pay for hours worked: an overtime hour counts once, and paid vacation and sick hours do not count.
- L&I sets hourly rates each January 1. In 2026 a restaurant pays $0.5126 an hour and a hotel $1.2117.
Do I have to carry workers' comp in Washington?
Yes, for any worker who is not exempt. Washington has no minimum headcount. You buy coverage from the state fund that L&I runs, not from a private insurer.
Insurance for an employee's medical bills and lost wages after a work injury is called workers' compensationWorkers' Compensation Insurance that pays medical bills and lost wages when an employee is hurt or sick because of work. Insurers call it workers' compensation. more →, or workers' comp. In Washington it is mandatory. (Source: L&I) Private coverage is not allowed. Self-insuring takes three years in business, a written safety program and a size test. (Source: L&I)
The account opens when you apply for or update your state business license. (Source: L&I) A restaurant depot still files an hours report for a quarter with no hours, and a late one costs at least $10. (Source: L&I)
The other seven states are on the index. For the policy itself, see our workers' comp coverage page.
Who counts as my employee in Washington?
Almost anyone who works for you, including part-timers and relatives. Sole proprietors, partners and some corporate officers are excluded.
A contractor who mainly sells you their own labor counts as your worker unless all six parts are met, such as free of your control and separate books. (Source: RCW 51.08.195) First hire? See what changes when you hire.
Whoever lets a contract is "primarily and directly responsible" for the contractor's premiums, so a commercial property owner who hires out repairs can be caught. (Source: RCW 51.12.070) L&I's "Verify a Contractor, Tradesperson, or Business" lookup shows whether an account is paid to date. (Source: L&I)
Relatives are covered workers, except children under 18 on a family-owned farm, which matters to a food manufacturer with a farm arm. (Source: L&I)
A privately held corporation can exclude up to eight officers who own shares and run the business daily. (Source: RCW 51.12.020) An owner who wants coverage elects it on form F213-042-000. (Source: L&I)
What do I pay premium on in Washington?
On hours, not wages. Each quarter you report the hours worked in each risk class, and L&I multiplies them by that class's hourly rate. Overtime hours count once, and paid leave hours do not count.
A restaurant is class 3905, at $0.5126 an hour in 2026. (Source: L&I 2026 rates) You may take back up to $0.16165 an hour from workers' pay, and no more. (Source: L&I) One quarter looks like this.
| What happens | Amount |
|---|---|
| Your restaurant staff work, leaving out paid leave | 5,000 hours |
| At the 2026 rate of $0.5126 an hour, you owe L&I (5,000 × $0.5126) | $2,563.00 |
| You take back from workers' pay the most allowed, $0.16165 an hour (5,000 × $0.16165) | $808.25 |
| So the part of the premium you carry yourself is ($2,563.00 − $808.25) | $1,754.75 |
Illustration only, with round numbers. It is not a statement of what any policy charges; your own policy wording governs.
A hotel or motel is class 4905, at $1.2117 an hour. A resident manager paid in rent is converted to hours using the class's average hourly wage. (Source: L&I) Restaurant staff at the hotel get the lower rate only with a separate license, timecards and no sharing of staff. (Source: Washington class rules)
A review of your real numbers after the policy year is called a premium audit. Washington's version is the quarterly report, due the month after each quarter ends, with L&I checks of your records. (Source: RCW 51.16.060) See the guide to the yearly payroll check.
Who sets the rate in Washington?
L&I does, by rule. There is no rating bureau and no insurer multiplier. It sets a fixed hourly rate for each risk class every January 1.
The class list is Washington's own, not a national bureau's manual. (Source: Washington class rules) Rates rose 4.9% on average on 1 January 2026. (Source: L&I) L&I has proposed another 4.9% for 2027, with a decision due 30 November 2026. (Source: L&I)
Your claims record moves the price through an experience factorExperience Modification Factor (E-Mod) A number, with 1.0 as average, that raises or lowers your workers' compensation price based on your claims compared with similar businesses. Insurers call it the experience modification factor. more →, a number where 1.0 is average. (Source: L&I)
A wholesaler or importer of groceries is class 2102 at $1.6525 an hour. A combined wholesale and retail business is 6407 at $0.8847. (Source: L&I 2026 rates) An online seller's fulfillment center with robots and fast delivery is 2103 at $3.5217, about four times the 6407 rate. (Source: Washington class rules)
What about workers in other states?
A Washington worker hurt out of state can still be covered. Work elsewhere counts as temporary for up to 30 days per state per calendar year, and premium still goes to L&I.
Past 30 days, you avoid Washington premium only by proving coverage in the other state and filing an out-of-state report each quarter. (Source: RCW 51.12.120)
A commercial fleet running only across state lines must still cover its Washington drivers unless another state's law does. (Source: RCW 51.12.095) If its records are missing, L&I can estimate up to 520 hours per driver per quarter. (Source: Washington rules)
To open elsewhere, see what changes with a new location in a new state.
What happens if I don't carry it?
L&I can assess the greater of $1,301 or twice the premiums for the four quarters before you were covered. If a worker is hurt first, it can add up to 100% of the claim's cost.
The $1,301 is the figure indexed on 1 July 2026. (Source: L&I) A grocery store that hires without an account is the plain case. L&I audited over 570 unregistered businesses in its 2025 fiscal year and assessed over $9.9 million. (Source: L&I)
Reporting too few hours can bring civil liability of up to tenfold the shortfall. (Source: RCW 51.48.020) Missing records can cost the greater of $650 or twice the quarterly premium. (Source: L&I)
Stop-work orders apply only to construction-trade employers, so none of the businesses named on this page faces one. (Source: RCW 51.48.022)
Common questions about workers' comp in Washington
File form F213-042-000. Coverage starts the day after L&I receives it, and you report 480 hours a quarter or your actual hours.
Three years. With no records, L&I can estimate your hours by dividing your gross wages by the state minimum wage.
After three years with no compensable claim, the claim-free discount is usually 10% and can reach 40%.
Not sure which Washington rule you fall under?
Tell us what your business does and how many hours your people work, and we will help you work out which of these rules applies and what to ask L&I.