OLYMPIA— Washington employers face higher penalties starting July 1, 2026, for violations of the state’s workers’ compensation laws as the Department of Labor & Industries applies a required inflation adjustment of 12.11 percent.
The increases stem from a 2020 state law that raised long-stagnant penalty amounts for the first time in decades and ordered automatic adjustments every three years based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers in the Seattle area. The first adjustment took effect in 2023 with a roughly 16 percent bump. This second round it intended to keep financial consequences meaningful as living costs rises, ensuring that the threat of penalties continues to encourage compliance with rules designed to protect workers and keep the insurance system solvent, the agency says.
These penalties serve as a critical deterrent in a system that continues to see the tragic human cost of workplace incidents. In April, the state honored 115 workers during its annual Worker Memorial Day ceremony, including 89 who died from work-related causes in 2025.
The Washington State Department of Labor and Industries covers medical costs, wage replacement and other benefits for roughly 2.8 million workers employed by more than 205,000 businesses insured through the state fund. In fiscal year 2025 the fund collected about $3.1 billion in premiums. During the same period L&I assessed more than $118 million in unpaid premiums, penalties and interest and recovered a total of $372.7 million in delinquent funds, most of it from overdue premiums.
One of the most common violations involves failing to register (RCW 51.48.010) for workers’ compensation coverage. Employers who operate without an account can face a minimum penalty that rises from $1,161 to $1,301, or twice the premiums due, whichever is greater. The rule exists because every business with employees in Washington must participate in the system; skipping registration shifts the cost of potential injuries onto the broader pool of compliant employers and leaves workers unprotected.
Violating a stop-work order (RCW 51.48.022) carries an even steeper daily cost. L&I issues these orders when employers continue operating without coverage, and each day of noncompliance will now trigger a penalty that climbs from $1,161 to $1,301. The orders serve as an immediate enforcement tool, halting unsafe or uninsured operations until the employer corrects the problem.
Record-keeping requirements (RCW 51.48.030) also carry higher stakes. Businesses that fail to maintain required employee payroll records can expect a minimum penalty that moves from $580 to $650, or twice the quarterly premiums owed, whichever is larger. Likewise, employers who refuse to let L&I inspect those records will see the same $580-to-$650 jump. Accurate records allow L&I to verify premium payments and ensure that injured workers receive the correct benefits; incomplete or hidden information undermines the entire program.
Physicians and medical providers who fail to file timely reports on work-related injuries (RCW 51.48.060) or who do not assist with claim processing (RCW 51.48.040) face penalties that increase from $500 to about $650. Prompt medical reporting helps speed up benefit decisions and prevents disputes that can delay an injured worker’s recovery.
Self-insured employers (RCW 51.48.017), who handle their own claims instead of paying into the state fund, encounter similar adjustments. Those who delay or refuse timely benefit payments can see penalties rise from a $1,161 minimum to $1,301, or 25 percent of the amount owed, whichever is greater. The same minimum now applies to willful attempts to obtain erroneous benefits or payments (RCW 51.48.250), though multipliers can push the total higher depending on the severity.
General noncompliance with Title 51 (RCW 51.48.080) of the Revised Code of Washington or L&I rules carries a penalty that adjusts from $1,161 to $1,301. These catch-all provisions cover a range of administrative lapses that, while not always dramatic, can erode trust in the system when left unchecked.
L&I intends to maintain strong deterrence without rewriting the underlying rules. The adjustments do not alter the process for determining whether a violation occurred or the opportunity for employers to correct problems before penalties are assessed. Instead, they simply ensure that the dollar amounts keep pace with economic reality.
Anyone who suffers a work-related injury or illness should report it to their employer right away and seek medical care. Employers are required to file a Report of Accident with L&I, but workers can also file directly through the agency’s FileFast online portal or by calling 1-877-561-FILE (3453), or by having their doctor submit the form. Self-insured employers manage their own claims, but workers still have the right to file with L&I if issues arise.
The agency stresses that early reporting leads to faster medical treatment and wage replacement, which can make the difference between a short recovery and long-term hardship.
Employers with questions can contact the agency’s insurance specialists or visit the workers’ compensation section of lni.wa.gov for guidance on registration, reporting and compliance.
Author: Mario Lotmore
