Mark Your Calendars: Inflation Adjustments Take Effect July 1, 2026, for Washington Employers
Washington’s statutory inflation adjustment to penalties for certain violations of workers’ compensation laws will take effect July 1, 2026. The anticipated adjustment for 2026 is 12%.
Inflation adjustments are relatively new to workers’ compensation penalties in Washington. Most penalties remained stable from 1985 until September 1, 2020, when the Washington legislature increased workers’ compensation penalty caps and enacted RCW 51.48.095. Under this statute, certain penalties must be adjusted for inflation every three years.
The Department of Labor and Industries calculates the adjustment by comparing the consumer price index for urban wage earners and clerical workers in the Seattle area over the three years prior to the adjustment. The first inflation adjustment took effect July 1, 2023, with a 16.5% adjustment.
With the anticipated adjustment of 12%, Washington employers can expect penalties currently set at $1,161 to increase to approximately $1,300. The anticipated penalty increases for each of the affected penalties are listed in the chart below.
If you would like to send a comment to the Department on the proposed adjustment, you can email . However, please keep in mind that the Department does not have any discretion over the inflationary adjustment.
For many self-insured employers, the most notable penalty subject to the inflation adjustment is for an unreasonable delay or failure to pay benefits under RCW 51.48.017. In evaluating whether a self-insured employer has been unreasonable in their delay or failure to make payment, the Board of Industrial Insurance Appeals has developed the “genuine doubt” test: whether the employer had a genuine doubt from a medical or legal standpoint about its liability to pay the benefit. In re Frank Madrid, BIIA Dec, 86 0224-A (1987). Division Two of the Washington Court of Appeals has likewise adopted the “genuine doubt” test. Taylor v. Nalley’s Fine Foods, 119 Wash. App. 919, 926, 83 P.3d 1018 (2018).
Putting the “genuine doubt” test into practice can be easier said than done. Employers and claims administrators can minimize penalty exposure by promptly investigating new claims if there is a question of liability and quickly responding to treatment authorization requests. In the unfortunate circumstance of the Department ordering a penalty, employers should take care to promptly pay the penalty. An unreasonable delay in paying a penalty may itself be grounds for assessment of a further penalty under RCW 51.48.017. In re Emily Eyrich, BIIA Dec., 11 22230 (2013).
If you have a question about penalty exposure on a Washington workers’ compensation claim, please contact Morgan at or (971) 369-5232.
Posted by Morgan Terhune.
