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Workers' Comp | Information for Employers in Washington State

What is Workers' Comp?

Workers' compensation, also known as industrial insurance, benefits both the employer and the worker by providing coverage for the financial impact of work-related injuries and disease. As an employer who provides workers' comp insurance, an employee ordinarily cannot sue you for damages relating to a workplace injury or illness. If an employee qualifies for workers' comp, they may be able to have their wages and essential medical benefits covered through the insurance.


Who Needs to Get Workers' Comp?

Coverage for employees, both full-time and part-time, is generally mandatory. Some exceptions may apply including:

  • Domestic workers in a private home — unless you have two or more regular employees who work for 40 or more hours a week.

  • Gardening, maintenance, repair, or similar work at your private home — this does not include individuals hired to do home improvements or upgrades.

  • Personal assistants that benefit you as an individual, not your business, such as someone who performs personal errands or chores for you.

  • Cosmetologists, beauticians, or barbers who rent or lease a booth space.

  • Some musicians or entertainers.

  • Children under age 18 that are employed by a parent for farm or agricultural activities

For a complete list of exclusions, please see RCW 51.12.020.


How Do You get Workers' Comp?

Workers' comp is administered by the Washington State Department of Labor & Industries (L&I) and must be purchased through the Washington State Fund, not a private insurance company.


When you apply for a business license and hire employees, L&I will send you an application within one week to assign you to an account manager. From there, they will set up your policy and give you information about your account, a rate notice, certificate of coverage, and required workplace posters.


In some cases, an employer with at least $25 million in assets, and some government entities, may qualify for self-insurance.


How Much is Workers' Comp?

L&I will make a classification based on your industry and workers' hours and provide you with a Workers' Compensation Rate Notice. This will give you information about the rate you must pay per worker, per hour/unit for each risk classification assigned to you.


Both you and your employee, through payroll deductions, contribute to cover the workers' comp premium. However, some employers choose not to make employee payroll deductions and pay for the total premium themselves.


Quarterly Reports & Payment

As an employer, you must file and make quarterly payments. To determine your premium for the quarter, you will need to calculate your workers' total work hours using timesheets and payroll records. Even if you don't have any hours or payroll to report for a quarter, you must still file a quarterly report.


Reports are due on the last day of the month following the end of a quarter. Due dates that fall on a weekend or holiday are due on the next business day. If you fail to file on time, you will be charged a late filing fee.


Here are the due dates for 2021:


What Do Employers Have to Do?

Recordkeeping

As an employer, you must keep complete and accurate payroll records that may be used for examination by L&I. This includes:

  • Employee information such as name, address, and SSN

  • Employment details including date hired, job title, type of work performed, and type of compensation

  • Payroll details including pay period, actual hours worked each day, gross pay, deductions, net pay, and check numbers of checks issued

  • State Unemployment Insurance (SUI) tax returns

  • Department of Revenue Excise Tax Returns

  • IRS forms and tax returns such as W-2s, 1099s, and 941s

  • Accident records

Posting Workplace Posters

When you open your account with L&I, you will receive a certificate of insurance coverage you must post visibly in your workplace.


You must also post three required L&I posters in a spot where employees can read them. These posters inform employees about what to do if a job injury occurs, their rights as a worker, and job safety and health law.


Need Help Reporting and Paying Taxes?

Here at Summit Bookkeeping, we offer tax reporting services for a variety of payroll and business taxes. Give us a call at (360) 756-5020 to learn more!



Disclaimer: This post is meant for informational purposes only and should not be taken as legal, business, or tax advice. Please consult with your accountant or bookkeeper for more information based on your specific situation. For more information, please read through the following resources:

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