SB 5927
In CommitteeSenate
Workers' comp. adjustments
Capping the rate of increase for future workers' compensation cost-of-living adjustments.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill caps annual cost-of-living adjustments for certain workers’ compensation benefits at 3%, starting in 2026, to improve long-term financial stability of the program. It specifically applies to pensions and disability payments for older claims, limiting how much they can increase each year based on changes in the state’s average monthly wage.
- Imposes a 3% cap on annual cost-of-living adjustments for pension and disability compensation for workers whose claims were established before July 1, 2026.
- Applies the 3% cap starting July 1, 2026, for adjustments based on the preceding year’s change in the average monthly wage.
- Maintains the current practice of adjusting benefits annually based on the full change in the average state monthly wage for adjustments made before July 1, 2026.
- Applies only to benefits under RCW 51.32.072 (pensions for permanently or temporarily totally disabled workers and survivors) and RCW 51.32.075 (adjustments for temporary/permanent total disability and death benefits).
- Does not affect claims where the right to compensation was established on or after July 1, 2011, until at least two years after the injury or disease manifestation.
Who is affected
- Workers receiving time-loss or pension benefits under pre-1971 compensation schedules — People receiving long-term pensions or compensation for permanent or temporary total disability under older workers' comp schedules (pre-1971), especially those whose benefits are tied to the average state monthly wage.
- Surviving spouses of deceased workers — Surviving spouses of deceased workers who receive ongoing pension payments based on the average state monthly wage.
- Children of disabled or deceased workers — Children of disabled or deceased workers who receive additional benefits based on the average state monthly wage.
- Employers and the Washington State Department of Labor & Industries — Employers and the state workers' compensation system, due to impacts on premium setting and long-term program funding stability.
Pro/Con Analysis
Potential Benefits (5)
The 3% cap improves long-term financial stability of the workers’ compensation fund by reducing exposure to wage-driven volatility, especially after 2019 saw COLA increases of up to 10.1%. This helps prevent sudden premium spikes for employers and reduces risk of program insolvency.
FinancialRef: Sec. 1, subsection (1)(a), (e); Sec. 2, subsection (2); Sec. 3, subsection (4)By reducing benefit growth for older claims, the cap helps stabilize premium rates for self-insured employers and local governments (e.g., cities, counties, school districts) that self-insure — potentially freeing up funds for other public services.
Local GovernmentRef: Sec. 1, subsection (1)(d); Sec. 2, subsection (2); Sec. 3, subsection (4)The cap contributes to more predictable premium setting, which supports small and medium-sized employers in budgeting for workers’ compensation costs — especially important for industries with higher injury rates (e.g., construction, logging, manufacturing).
Business & EmploymentRef: Sec. 1, subsection (1)(c); Sec. 2, subsection (2); Sec. 3, subsection (4)The bill’s focus on program stability may reduce the need for emergency premium increases or legislative interventions during economic downturns or wage surges, providing a more predictable operating environment for all stakeholders.
FinancialRef: Sec. 1, subsection (1)(b); Sec. 2, subsection (2); Sec. 3, subsection (4)State and local governments that participate in the workers’ compensation system benefit from reduced long-term liability risk, which may improve fiscal planning and reduce pressure on general fund subsidies.
Local GovernmentRef: Sec. 1, subsection (1)(a); Sec. 2, subsection (2); Sec. 3, subsection (4)
Potential Concerns (5)
The 3% cap on COLAs for pre-2026 claims reduces long-term benefit growth for workers and survivors receiving pensions or disability compensation under older schedules, especially those whose benefits are tied to the volatile average monthly wage. This could erode real purchasing power over time, particularly if inflation exceeds 3% in any given year.
FinancialRef: Sec. 2, subsection (2); Sec. 3, subsection (4)Workers with long-standing, severe disabilities (e.g., amputations, spinal cord injuries) who rely on fixed or slowly growing benefits may face increased financial stress and reduced access to necessary supports (e.g., home modifications, transportation, attendant care) if benefit growth lags behind cost of living — potentially worsening health outcomes and increasing reliance on other public services.
Public SafetyRef: Sec. 2, subsection (2); Sec. 3, subsection (4)Beneficiaries with fixed or capped incomes may struggle to keep up with rising housing costs, especially in high-cost regions like King or Snohomish counties, increasing risk of displacement or housing instability over time.
HousingRef: Sec. 2, subsection (2); Sec. 3, subsection (4)Capped benefits may limit access to necessary medical care, durable medical equipment, or home modifications for people with permanent disabilities, especially if out-of-pocket costs rise faster than benefits.
HealthcareRef: Sec. 2, subsection (2); Sec. 3, subsection (4)Employers benefit from reduced premium volatility and more predictable long-term liability, but this is offset by the fact that the cap only applies to a narrow subset of claims (pre-2026 pensions/disabilities), while most new claims remain unaffected.
Business & EmploymentRef: Sec. 2, subsection (2); Sec. 3, subsection (4)
Who Is Most Affected
Workers receiving pensions/disabilities under pre-1971 schedules (mostly older, severely disabled individuals) will see slower benefit growth starting in 2026. While the cap reduces volatility, it may erode real-term purchasing power over time, especially if inflation exceeds 3%. This group is disproportionately older, lower-income, and reliant on these benefits for daily living.
Surviving spouses of deceased workers who receive ongoing pensions tied to the average monthly wage will see slower benefit growth starting in 2026. Many are older women on fixed incomes; reduced growth increases risk of poverty or reliance on other public assistance over time.
Children receiving dependent benefits (under age 18 or disabled) will see slower growth in support payments. While the impact per child is modest, cumulative effect over many years could reduce household income stability for families with multiple dependents.
Self-insured employers (including many local governments and large employers) benefit from more predictable liability and reduced premium volatility. However, the cap only applies to older claims, so new employers and small businesses paying into the state fund see less direct benefit.
The Washington State Department of Labor & Industries benefits from improved program solvency and reduced need for emergency rate adjustments. This supports long-term operational stability and reduces political pressure for ad hoc fixes.