How to Read Your L&I Rate Notice

Each December, the Washington State Department of Labor & Industries sends every state-fund employer a rate notice for the coverage year that begins in January. [1] The notice lists the risk classification or classifications assigned to your account, the base rates for each, your experience factor, and the hourly rate that results, including the portion to be withheld from employees' pay. Ten minutes with it in December is lower than discovering a wrong classification in an audit.

Key points

• The rate notice arrives in December and applies to coverage from January 1. If a payroll service files your reports, L&I says to share the notice with them. [1]
• Each risk classification on the notice has its own base rates. L&I assigns one or more classes based on the nature of your business. [2]
• The hourly rate for a class is your experience factor multiplied by the sum of the Accident Fund, Medical Aid Fund and Stay at Work base rates, plus the Supplemental Pension Fund base rate. [1]
• The experience factor is recalculated every year from three years of reported hours and claims. A business that is not yet experience rated pays the base rates without an adjustment. [3]
• A protest of a Rate Notice has a 60-day deadline, so questions should be asked promptly. [4]

What the notice is and when it arrives

Washington is a state-fund workers' compensation state. For most employers the insurer is L&I, and the rate notice is L&I's annual statement of what your coverage will cost per hour worked. [1] L&I issues it in December for coverage that begins in January, and its guidance says that employers who use a payroll service should share the notice with that service so the right rates and withholdings apply from the first pay period. [1]

The same figures are available in L&I's online Claim & Account Center, which also shows your account and premium information through the year. [1]

Your risk classifications

The notice names each risk classification on your account, with its code and a short description. L&I assigns every employer one or more classifications based on the nature of the business. There are more than 300 of them, defined in chapter 296-17A of the Washington Administrative Code. [2] Each classification carries its own base rates, which is why a business with two classes sees two sets of figures. [2]

Read the description, not only the code. The description is what L&I believes your business does. If it names a trade you do not perform, or misses one you do, the rest of the notice is built on the wrong foundation. L&I's own guidance on managing rates starts with checking the risk classes on the December notice. [5]

The base rate components

Under each classification the notice breaks the base rate into four funds: the Accident Fund, the Medical Aid Fund, Stay at Work, and the Supplemental Pension Fund. [1] L&I publishes the base rate for each fund and each class in its annual rate tables. [6]

They are not shared the same way between employer and worker. L&I says employers pay the Accident Fund portion in full, and that workers and employers each pay half of the Medical Aid, Stay at Work and Supplemental Pension portions. [7] The Stay at Work component is small and funds the program of the same name, which reimburses eligible employers for part of the cost of light-duty work. [5]

The experience factor

Below the base rates sits a single number, usually close to 1. L&I calculates an experience factor for each business every year and uses it to adjust the base rates up or down. [3] The factor is built from a three-year experience period, which L&I describes as the oldest three of the four fiscal years before the rate year, so the window that produces your 2027 factor closed well before 2027 begins. [3] A firm that has reported worker hours during that period is experience rated. [3] A business that is not yet experience rated has a neutral factor, which means it pays the base rates as published.

Where a business's claim costs are expected to run higher than others in the same classifications, L&I assigns a factor above 1. [3] Where they are expected to run lower, the factor falls below it. That is why two businesses in the same class with the same hours can receive different notices, and why a claim from two years ago still shows up this year. Our guide to how workers' compensation claims work explains what happens on the claim side.

How the pieces become an hourly rate

For each classification, L&I multiplies your experience factor by the sum of the Accident Fund, Medical Aid Fund and Stay at Work base rates, then adds the Supplemental Pension Fund base rate. The result is the rate per hour worked for that class. [1] Because the Supplemental Pension Fund rate is added after the multiplication, your experience factor does not change it.

Premium in Washington is based on hours, not payroll: the notice gives a rate per hour, and your quarterly report applies it to the hours worked in each class. [5] [7] And the employee share is inside that hourly rate. Because employers pay the full Accident Fund portion and workers pay half of the other three, the notice shows the amount per hour that can be withheld from each worker's pay. [7]

For the general background on class codes and experience modifiers outside Washington, our explainer on how workers' compensation premiums are calculated covers the private-market version.

What to check

• Every risk classification you expected is listed, and no class describes work you do not do.
• Each classification's description matches the work your employees perform, not the name of your business.
• The experience factor moved in the direction your claims history suggests. If it rose and you have had no claims, ask why.
• The base rates match L&I's published rate tables for the year. [6]
• The employee withholding per hour is updated in payroll for the first January pay period.
• If a payroll service files for you, they have a copy. [1]
• The notice date and the 60-day protest window are in your calendar. [4]

Whom to call

Start with L&I: your L&I account manager if you have one, or Employer Services, which publishes a phone line for classification and rate questions. [2] For a disagreement rather than a question, L&I's protest process (also called a request for reconsideration) applies, and L&I lists the deadline for a Rate Notice as 60 days. [4] Confirm the date with L&I; the deadline is theirs.

Then call your broker. A broker cannot change what L&I has decided, but can read the notice with you, flag a classification that does not fit, and keep the stop-gap side in line. Our page on workers' comp insurance in Washington explains how the state fund and employer's liability coverage fit together, and our service center is where to send the notice if you want it reviewed.

Sources

[1] Washington State Department of Labor & Industries, Calculating premium rates. Accessed October 28, 2026.

[2] Washington State Department of Labor & Industries, Risk classes for workers' compensation. Accessed October 28, 2026.

[3] Washington State Department of Labor & Industries, Experience rating. Accessed October 28, 2026.

[4] Washington State Department of Labor & Industries, Appeal coverage and rates. Accessed October 28, 2026.

[5] Washington State Department of Labor & Industries, Reducing rates. Accessed October 28, 2026.

[6] Washington State Department of Labor & Industries, Rates for workers' compensation (annual base rate tables). Accessed October 28, 2026.

[7] Washington State Department of Labor & Industries, Proposed 2027 workers' compensation rates (rates notice page). Accessed October 28, 2026.

[8] Board of Industrial Insurance Appeals, Employer premium appeal. Accessed October 28, 2026.

Coverage examples are illustrative. Policy wording, exclusions, limits, underwriting and applicable law determine coverage. This article is general information, not legal advice or a coverage determination.