• Undocumented Immigrants and Washington State Workers’ Compensation

    Undocumented Immigrants and Washington State Workers’ Compensation

    Compensation Claims

    In Washington and around the country, immigrants, and especially undocumented immigrants do some of the least rewarding work: jobs where the pay is low and the risk is high.[2] Industries with the highest concentrations of undocumented workers are farm labor, building or grounds maintenance, construction, and food service.[3]  These workers often endure dangerous and illegal workplace conditions because employers know most undocumented workers will not complain. Nonetheless, undocumented workers who are injured on the job have the same rights to workers’ compensation benefits in Washington as other workers do. It is the employers job to comply with federal and state laws governing the hiring of workers. Once hired they become a worker, subject to workers’ compensation regulations, regardless of immigration status. Workers’ compensation advocates who represent undocumented workers will benefit from understanding the special issues these workers present. This article will serve as an introduction to the topic.[4] It will briefly cover difference between state and federal law that leads to confusion as to whether undocumented workers are entitled to benefits, unique issues for injured undocumented workers in the Washington workers’ comp system, and considerations for attorneys representing undocumented immigrant workers.

    Federal versus State Law

    On first blush, there appears to be a conflict between the way undocumented people are treated under federal immigration law and how they are treated in Washington’s workers’ compensation system. Federal immigration law states that undocumented aliens cannot lawfully work in the United States and employers cannot knowingly hire them.[5] However, Washington workers’ compensation coverage, and L&I’s administration of the system, is based on the statutory definition of “worker” found at RCW 51.08.180. This statute does not differentiate between documented and undocumented workers so the Department of Labor & Industries (L&I), the agency in charge of workers’ compensation in Washington, has committed to protecting all workers regardless of status.

    The apparent conflict with federal law came to the forefront of discussion after the 2002 Supreme Court decision in Hoffman Plastic Compounds, Inc. v. NLRB.[6] In brief, the Hoffman court stated that because an undocumented immigrant was not lawfully allowed to work in the U.S., an award of back pay for wrongful discharge due to union activity would contravene federal immigration law.[7] However, many decisions since Hoffman have limited its application in a variety of contexts. In a number of states (but not Washington) courts have explicitly found that federal law does not preempt workers’ compensation law. For instance, an Illinois court, in deciding whether an undocumented injured worker was entitled to workers’ compensation benefits, analyzed the legislative history of the Immigration Reform and Control Act of 1986 (IRCA) and stated:

    [N] othing in the IRCA or its accompanying regulations indicates that Congress sought to supersede state laws providing workers’ compensation benefits to injured employees, whether undocumented or otherwise. To the contrary, the IRCA’s legislative history suggests that the statute was not intended “to undermine or diminish in any way labor protections in existing law.”[8]


    Furthermore, there are many strong policy reasons to provide workers’ compensation benefits to undocumented workers. First, if undocumented workers were not eligible for benefits, it would create an incentive for employers, especially those operating in dangerous industries, to hire those workers because the employers could save money on workers’ compensation premiums. Those employers could maintain workplace hazards with little worry that the cost of worker injuries would impact them beyond the cost of replacing workers. This could create dangerous workplaces for immigrant and non-immigrant workers alike.  Second, as recognized by the Illinois Court of Appeals, “eligibility for workers’ compensation benefits in the event of a work-related accident can[not] realistically be described as an incentive for undocumented aliens to unlawfully enter the United States.”[9] Third, because the workers’ compensation system in Washington is a quasi-insurance system where rates are charged according to an employer’s track-record and industry risk, covering all workers maintains the integrity of the system and allows for a distribution of costs based on actual use. Workers’ compensation is the appropriate system to cover the costs of on-the-job accidents, rather than social services to which undocumented workers would otherwise turn, adding to the burden for those systems. Finally, when the Washington workers’ compensation system was created, it took an injured worker’s ability to recover costs from an employer out of the jurisdiction of the courts.[10] Prior to the existence of workers’ compensation, injured workers had to sue their employers for the costs of their injuries. The process was expensive, slow, often inadequate for the workers, and uncertain to all parties involved.[11] Washington’s unique response in the evolving case law was to establish “sure and certain relief” for injured workers. Thus undocumented workers are included in the Washington workers’ compensation system, and not forced to take their injuries through the courts, which would replicate the same problem that the workers’ compensation system was established to solve.

    The Washington workers’ compensation system protects all workers, regardless of immigration status. The statute defines “worker” broadly and does not exclude undocumented workers.[12] In fact, the law expressly states, “This title shall be liberally construed for the purpose of reducing to a minimum the suffering and economic loss arising from injuries and/or death occurring in the course of employment.”[13] Moreover, L&I’s policy is explicit that undocumented workers are covered by workers’ compensation. In 2002, in response to the Hoffman Plastic decision, L&I’s director, Gary Moore, issued a statement. Mr. Moore wrote, “All workers must have coverage. . . . The agency has and will continue to do [its work] without regard to the worker’s immigration status.”[14]


    Special Issues for Undocumented Injured Workers

    Undocumented injured workers face unique challenges in accessing and receiving workers’ compensation benefits. To begin with, many undocumented workers fear their status will be discovered if they make a claim for benefits. Undoubtedly, this fear prevents many injured people from seeking treatment and benefits through the system. These fears may be partially assuaged with the information

  • Senate Bill 5594 Protection For Health Care Workers

    Workers Compensation Info

    Can a cancer drug cause cancer is someone who doesn’t have cancer?  YES!

    Health care workers can contract similar conditions as those they are treating in others, often by transmission of toxic agents contained in the very same health care drugs being used to effect a cure.

    The Washington State Department of Labor & Industries has been formally directed by the Legislature to adopt requirements for the handling of anti-neoplastic and other hazardous drugs, so as to protect health care workers from hazardous  exposure to such drugs.

    Washington is the first state in the nation to require such protection of health care workers.  Senate bill 5594 directs the department to adopt rules such as proper ventilation, protective equipment, and safe handling practices.

    Rules adoption will likely involve stakeholders, public meetings, and haggling over details.  Health care workers would be well advised to participate in this process so they are heard over the loud voices of other vested interests, for example a hospital or drug manufacturer who may be more interested in shielding themselves from liability then they are in worker safety.

    The bill is a good start, thank you Senator Jeanne Kohl-Welles.  There is still much work to be done.

  • Second Injury Fund Assessments

    Second Injury Fund Assessments

    Compensation Claims

    The second injury fund (SIF) just got harder to access.  Back in the old days, savvy self insured employers used the SIF frequently and in effect got their fellow self insured employers to share in paying all their SIF pension costs.

    That changed recently in a two step process. Effective July 2009, a portion of the SIF assessments became 50% experienced rated. Effective 11/5/10, a portion of the SIF is 100% experience rated. The most recent change will apply to rates collected beginning the 3rd quarter of 2010.

    These changes will tighten up SIF usage.  Since all self insured employers will still pay into the SIF, whether they use it or not, there is still a sharing of costs.  However a self insured employer who previously liberally used the SIF will now pay proportionally more for their usage.

    The clear implications are that more pensions will be contested.  This contest will not be for second injury fund status, since under even the newest formula, there is still a cost sharing. The fight now will be getting and keeping a pension order.

    The current 50% experience rating formula can be found at WAC 296-15-225.

    The November 5, 2010 version is at Proposed WAC 296-15-225.

    2010 Rate Notice.

    The DLI contact person for this change is Larry Wilkinson at 360-902-6867.

  • L&I Premiums – The Reason Employers Fight Workers’ Compensation Claims

    L&I Premiums – The Reason Employers Fight Workers’ Compensation Claims

    Compensation Claims

    Washington’s L&I premiums are a significant expense, especially in hazardous industries. This article will discuss how L&I sets rates and how employers and workers can help control this cost. Injured employees who understand these principles can help make better decisions about their claims.

    What Is the Workers’ Compensation Classification System for Employers?

    The classification system is a way for L&I to collect loss information for each industry insured.  This information is used to establish premium rates that employers will pay for their workers’ compensation insurance.

    The goal is for more hazardous industries to pay higher insurance rates, for example loggers pay a higher rate than do office workers.

    • RCW 51.16.035 states that the classification system should be “based on the degree of hazard workers are exposed to.”

    Calculating the Employer’s Rate

    • Premium Rate – In Washington, premiums are based on the worker’s exposure to risk (hours on the job).
    • Formula:  Premium Rate = Firm’s Experience Rating x (Class Accident Fund Base Rate + Class Medical Aid Fund Base Rate) + Supplemental Pension Fund Base Rate
    • Experience Rating – Pursuant to WAC 296-17-855 this is based on the experience period which is the 3 year period ending 18 months before the rating year.  This rating is affected by time loss, medical and permanent partial disability benefits paid in claims.
    • Workers’ Compensation Risk Classification (Link at http://www.lni.wa.gov/ClaimsIns/Insurance/RatesRisk/Check/RatesHistory/default.asp – 2010 Rates)
    • Base Rates – The same base rates are used by all Washington employers in a given classification before modification by the experience factor.  There are three separate base rates for each classification:
      • Accident Fund – Provides for wage replacement, permanent disability and death benefits, as well as certain vocational rehabilitation benefits for injured workers – WAC 296-17-895
      • Medical Aid Fund – Provides for medical care and vocational rehabilitation counselor services for injured workers – WAC 296-17-895
      • Supplemental Pension Fund – Provides for cost of living adjustments (COLA) for injured workers receiving extended wage replacement benefits – WAC 296-17-920

    The supplemental pension hourly rate is the same for all classes rated per hour worked and is not related to the risk in the class.
    How Do Employers Legitimately Reduce Rates?

    • Prevent Injuries and Save Money – Create and follow sensible safety and health workplace rules; request a free safety and health consultation; and communicate to employees a commitment to safety.
    • Qualify for Refunds – Retrospective Rating Program
    • Hire a Previously Injured Worker – Financial incentives to employers who hire injured workers.
    • Minimize an Injured Employee’s Time Off Work – The less time off work the less money paid on a claim.
    • Earn a Claim-Free Discount

    How Do Employers Illegally Reduce Rates?

    • They suppress claims.
    • They return injured workers to the job, then fire them without just cause.

    Employer Protests and Appeals of Rates

    • Notice and Order of Assessment (NOA) can be protested within 30 days
    • Revocation of Coverage, Classification Change or Rate Notice can be protested within 60 days

    If an employer still disagrees after a protest has been addressed by the Department, they can appeal to the Board of Industrial Insurance Appeals.

    Employees Premium Rates

    Rates for a workplace are calculated based on the employees experience, rating, and industry as set out above. Employees in the state fund cases pay a percentage of this premium.  Self insured employees do not share in premium costs.

    What percent of the premium do employees pay?

    The worker portion of the premium averages 27 percent for all industries. However, this average varies somewhat from industry to industry and from year to year based on changes in the three different trust funds (accident, medical aid and supplemental pension funds) that make up the composite rate.

    Some examples of the worker share of premiums for different risk classes are shown in the table below:

    Risk class Business type Employee share through
    payroll deduction
    0101 Excavation, Road Construction 19.7%
    0510 Wood Framing 20.9%
    1102 Trucking 19.2%
    3402 Machine Shops 23.9%
    3905 Restaurants, Taverns 32.2%
    4904 Clerical Office 40.8%
    4908 Colleges, Universities 36.5%
    5301 Accounting, Law 38.4%
    5302 Software Design, Engineer, ISP 43.1%
    6305 Clothing and Shoe Sales 33.3%
    6402 Supermarkets 28.5%
    6406 Retail Stores N.O.C. 32.8%
    6502 Banks 39%


    2010 Rate Increase

  • Your State of Washington L&I pension – Is it safe?

    Your State of Washington L&I pension – Is it safe?

    Workers Compensation Info

    You can’t miss the headlines and daily news stories about pension funds in trouble, some of them in big trouble.

    The failing pension funds of various private employers, publicly traded companies, unions, municipalities, and states appear to be spreading like an epidemic.  It’s enough to make you think they are all part of the same plan.  But they are not.

    Each plan is separate, being a matter of contract, bargaining, agreement, or creation of the legislature.  For example the ailing public employee pension fund which is reportedly in trouble and underfunded is not a part of and has no relationship to an L&I pension for an injured worker.

    If every fund is different, then why are so many failing at the same time? A review of the basics is in order.


    Pension funds are dynamic. Their health fluxuates with contributions, investment returns, and payment obligations.

    A funded pension plan’s health is measured by the ratio of its assets to its obligations.  A fund with assets equal to or greater than obligations is healthy.  If assets are less than obligations, then the plan is underfunded and not so healthy.

    Pension funds – like the rest of us – are suffering from the current financial crisis.  Fewer employees mean less contributions.  Investment returns are down and most plans have not increased their contributions to offset their investment losses, and their lower than expected contributions.  The result is that many pension plans are underfunded.


    Check with your plan administrator.


    It is an award of monthly payments for life.  It is the result of permanent total inability to work at any job, caused by a job injury or occupational disease.  It is not similar to a company pension given in return for years of service.


    Each year the Department of Labor & Industries assesses the adequacy of the pension fund.  If additional monies are needed, then the accident fund and self-insurers are tapped for money to keep the pension fund’s assets and liabilities equal.


    The L&I pension funds are invested.  The investments are managed by the State Investment Board which historically has a good investment record. Most of the investments are in long term fixed rate bonds.


    Pension obligations are up, in large part due to an aging work force, a tight job market, and an annual cost of living adjustment.


    L&I has taken care of their pension fund to date.  “The pension reserve fund currently has assets of $3.2 billion which is considered equal to its liabilities,” according to spokesperson Vickie Kennedy at the Department of Labor & Industries.

    Your L&I pension is safe for now and into the foreseeable future.  L&I has done a good job with their pension fund.  However no pension plan is fail safe. Because your pension may be paid out over several decades there is plenty of time for actual fund performance to deviate. Another market crash or a legislature which runs amok and changes the rules could someday cause problems.  Rest assured for now and check back here next year.


    Additional information about L&I claims, including pensions, can be gotten from the Department of Labor & Industries.

  • 2011 Legislative Updates

    2011 Legislative Updates

    Workers Compensation Info

    Several bills impacting workers’ compensation were signed into law by Governor Christine Gregoire this year. A brief summary of some of the major changes follows.

    Permanent Partial Disability (PPD) payments

    The 8% interest applied to the unpaid balance of PPD awards has been eliminated. This will apply only to claims with dates of injury or disease manifestation on or after June 15, 2011.

    For claims with dates of injury or disease manifestation prior to June 15, 2011, L&I and the self insureds must continue to:

    Calculate and pay interest on PPD awards paid in monthly installments.
    Document the interest payments when submitting the PPD Payment Schedule to the department.
    Failure to pay interest is considered a delay of benefits.

    Any prior PPD awards paid under the claim or claims that gave rise to a pension will be deducted either from the:

    Monthly pension benefit
    Pension reserve.

    Note: Any interest paid on a prior PPD award will not be deducted from the pension.

    Cost-of-Living Adjustment (COLA) freeze

    The 2011 Legislature froze COLAs for one year. Those who receive time-loss compensation or pension benefits will not receive an adjustment this July 1.

    Minimum and Maximum time loss rates; PPD schedules

    Minimum and maximum time loss rates will increase effective July 1, 2011, but only for new claims with dates of injury on or after July 1, 2011.

    PPD schedules will also increase effective July 2, 2011.
    Information about theses increases will be published in the near future.

    Structured Settlement Agreements (SSAs)

    Beginning January 1, 2012, self-insurers will be able to negotiate structured settlements to resolve disability benefits on some claims. The worker and self-insured employer are the parties who negotiate self-insured settlements. The department is not a party to self-insured settlements.

    The department will keep copies of all SSAs, including those negotiated by self-insurers. All payments made to workers under SSAs must be reported to the department as claim costs.

    Medical Provider Networks

    L&I will establish an industrial insurance helath care provider network for state fund and self-insured injured workers. Participating providers will be required to meet network standards.
    More information on provider networks can be found at http://www.lni.wa.gov

    Vocational Rehabilitation Option 2 Benefits

    Time frames have been changed to allow time extensions in some cases.

    When a worker has received Option 2 benefits, and it is later determined that claim closure is not appropriate, an overpayment may be assessed.…

  • Workers’ Comp Reform Is In The Air

    Workers’ Comp Reform Is In The Air

    Workers Compensation Info

    Big industry is rich and getting richer. They reap multi-billion dollar profits, and together with the Supreme Corp. Court of America, they have made it easy for business to buy politicians so business can have their political will done.

    This includes continuing and relentless pressure on the working class. Many good jobs have gone abroad. The jobs that stay here pay less, have fewer benefits, and are subject to the eroding effects of corporate sponsored anti-worker legislation. This includes yearly attacks by business on the workers comp system in order to produce even greater profits.

    The workers and their workers’ compensation system have so little protection. Even the workers don’t know enough to protect their workers’ compensation system.

    Individual workers who need the workers comp system tomorrow don’t realize that today, because today they are working hard and trying to keep their job. They don’t realize how bad an injury can be. Unions, trial lawyers, and L&I do the best they can to watch out for the interest of injured workers, but the assault continues.

    The media, owned by business, runs biased stories about worker fraud, inflaming the public. These unfair media accounts cause the working class all too often to vote against their own self interest.

    It’s not until they suffer a serious and legitimate job injury and incur the devastating effects of this injury and job loss does that individual worker see how important a fair workers comp system is to their survival.

    In many States around the country, the workers comp systems are mere skeletons of what they once used to be; getting hurt on the job on those states is a little more than a prescription for a lifetime of poverty. Politicians in these states compete with each other to see which state can stick it to their injured workers the most and thereby attract more industry.

    Things here at home are better than around the country. The State of Washington is different. Here the people understand the issues better and vote smartly to protect the system that protects their workers. The recent defeat of I-1082 is one good example of voters being smart, protecting their work force rather than try to attract another multibillion dollar industry.

    The State of Washington however is not immune from the recession and its financial pressures. Our governor has had to slash many beneficial social service programs in order to keep the state from going broke.

    At the same time, the pressure is also on her from industry, labor, and L&I to once again “reform the workers comp system.” The governor and L&I have gotten together and are drafting a legislation designed to both strengthen the workers comp system and cut unnecessary costs. The legislation currently being drafted is expected to include the following elements:

    • Instituting an L&I-directed medical provider network that preserves workers’ right to choice of physician while increasing oversight and promoting occupational health standards;
    • Expanding the successful Centers of Occupational Health Excellence pilot project both around the state geographically and with enhanced case management;
    • Increasing permanent-partial disability rates by 30% (and for the first time since 1993);
    • Enhancing efforts to return injured workers to their job through wage assistance for their employer;
    • Developing more job-search assistance tools and support measures for workers found able to return to work and thus ineligible for vocational services;
    • Continuing safe workplace investment grants;
    • Saving costs by deducting prior-paid PPD from pension reserve accounts;
    • Offering a targeted and worker opt-in compromise and release for workers over age 55 to better balance individual vocational retraining interests with job market realities; and,
    • Clarifying the amount a worker on pension can additionally earn through part time work.

    We have a smart governor who is doing her best to watch out for the citizens of Washington. Her plan has merit.

    It gives in some areas; it takes in others and it makes the system more efficient. Once developed, this legislation should be looked at carefully and if it is all that is hoped for it should be easy for the people of Washington State to support it, support their workers, and support a viable economic growth of the State.…

  • I-1082 in Washington State: Workers’ Compensation at the Crossroads

    I-1082 in Washington State: Workers’ Compensation at the Crossroads

    Workers Compensation Info

    A coalition of consumer groups recently released a report critical of a move to privatize Washington’s state-run workers’ compensation program, saying the current system is “remarkably cost-effective, with higher benefits to workers.”

    Voters in Washington State will soon make a big decision. They will be asked to keep our current non-profit workers’ compensation system, with it’s relatively high benefits and low cost, or hand over the fate of future injured workers to the private insurance industry. Here is what the Washington State Labor Counsel thinks about this initiative, in two words: VOTE NO!

    In greater detail:

    I-1082 is the private insurance financed initiative designed to privatize our existing and working non-profit system. Powerful interests are spending millions to convince you that I-1082 will “save jobs,” but here’s the truth:

    I-1082 privatization will drive up employers’ costs. The same profit-minded insurance companies that gouge us on health insurance will do the same with workers’ compensation. Rates will skyrocket for employers that stay in our public non-profit system because private insurers will cherry-pick low-risk employers from the system.
    I-1082 privatization will kill jobs and lower wages. Ending worker contributions to the system, as I-1082 does, means a 25% rate hike for employers. Not only will this cost precious jobs amid a recession, employers will also cut wages to try to make up the difference.
    I-1082 privatization will add a profit motive to our public non-profit system. Wall Street-based insurance companies like AIG (America’s biggest private workers’ compensation insurer) are driven by the bottom line, not by public service. They try to deny injured workers’ claims and charge employers as much as they can get away with.
    I-1082 privatization will force injured workers to fight the giant insurance companies for their benefits. These insurers routinely deny claims – just as they do for health insurance – and they have deep pocekts to drag out the legal process through endless appeals.
    I-1082 privatization will lead to taxpayer bailouts to maintain employers’ coverage and workers’ benefits when insurance companies go bankrupt. This has repeatedly happened in California and other states – costing taxpayers billions – after insurers temporarily charged artificially low rates to try to gain market share and then failed, leaving the state to pick up the tab.

    Do you really trust insurance companies to protect you and your family

  • Summertime in Washington State, time for an L&I COLA

    Summertime in Washington State, time for an L&I COLA

    Workers Compensation Info

    Cost of living adjustments (COLA), are the once a year right and privilege of L&I time loss and pension recipients.

    Effective July 1st, most workers receiving time loss or pension benefits became entitled to an automatic cost of living adjustment.

    This year it’s COLA light for the injured workers. The COLA multiplier is 1.01939. For those of us without stellar math skills, this means the COLA is just below 2% (.01939). The COLA increase is different each year and is a factor of this states average weekly wage.

    COLA payments come one of two ways for pensioners. 15 day method: L&I prefers to utilize what they refer to as an auto pay; wherein a 15 day COLA only check is sent out sometime in mid to late July. Since pensioners are paid once a month on the 15th for the previous month, this 15 day check catches them up, so that on August 15, their new COLA shows up in their regular check and the amount of that check is the same amount they will receive for the remainder of the year.

    45 day method: Because of the the magnitude of this project not all pension recipients can be paid this way. So the remainder of the pensioners get their 15 day July 1 to July 15 payment tacked onto their next check. Since pensioners are paid retrospectively not prospectively, this shows up in the August 15 check. While this 45 day method is monetarily fair, it creates two problems.

    First there is the waiting for that first 15 days of COLA. Second and significantly, this 45 day method makes the August 15 check larger than it would otherwise be (it has 45 days rather than 30 days of COLA in it) and that extra 15 days of COLA creates inaccurate expectations in the minds of these pension recipients.

    Injured workers who also receive Social Security benefits, are subject to special rules. If you are comp high, also known as ACE high, then you get the same yearly COLA adjustment as everyone else. However, if your benefits are calculated based on the 80% method, then no COLA, rather you receive a triennial redetermination. Questions about that can be directed to L&I.

    Would you like a chart of this and past COLA’s? Here it is, from 1971 to the present, together with L&I’s best wishes for a refreshing summer.…

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