ICYMI: Washington workers’ compensation COLA increase goes into effect as of 7/1/2025
It’s that time of year again: COLA increase! Every year, the Department recalculates benefits to reflect the annual changes in the state’s average wage as determined by the Washington State Employment Security Department. As of July 1, 2025, the COLA increase of 6.8 % went into effect, raising the maximum monthly time loss rate to $9,516. The COLA increase is not limited to time loss benefits. The increase also applies to beneficiary pension benefits.
There are two methods to calculate cost of living adjustments: 5 decimal increments and 10 decimal increments on a yearly basis, or cumulative factors that don’t require yearly computations. Time loss rates that are set at either minimum or maximum will increase to the new minimum/maximum rates as of July 1, 2025. The new minimum time loss rate is $1,189.50. For those with spouses or registered domestic partners, $10 is added to the minimum time loss rate. The same $10 increase is also applied for each dependent child – up to 5 dependents.
Although the July 1, 2025 COLA increase affects the minimum and maximum monthly time loss rates, the following remains the same:
- Per RCW 51.32.075, there will not be a cost of living adjustment to time loss rates for dates of injury on or after July 1, 2011 until the second July after the date of injury.
- Incremental COLAs, not cumulative, should always be used to calculate time loss for workers whose time loss rate is set at 15% of the state’s average wage (i.e. minimum rate).
Loss of earning power (LEP) calculations were also adjusted based on the updated state’s average monthly wage. LEP calculations from July 1, 2025 through June 30, 2026, are equal to 1.5 times the state’s average monthly wage for a total of $11,895 (daily rate of $396.50). This rate should be used for any LEP entitlement during that period.
Calculating time loss and LEP rates can be difficult, but SBH is here to help! If you have any questions, or if you would like to receive a copy of SBH’s quick reference guide covering this topic, you can contact Elyse Waters at or 503-412-3111.
Posted by Elyse Waters.
