The bill aims to enhance the stability of Washington's workers' compensation program by capping the rate of increase for future cost-of-living adjustments (COLAs) for certain benefits. Specifically, it introduces a new section that establishes a three percent cap on COLAs for pension calculations, addressing the volatility of the average monthly wage, which is used as the basis for these adjustments. The legislature highlights the need for this cap due to significant fluctuations in premium rates and average monthly wages over recent years, which have made it challenging for employers and employees to plan for the future.

In addition to the new cap, the bill amends existing laws (RCW 51.32.072 and RCW 51.32.075) to reflect these changes. It specifies that adjustments to compensation will be based on the percentage change in the average monthly wage, with the new cap taking effect starting July 1, 2026. The amendments also clarify the timing and conditions under which these adjustments will be made, ensuring that they do not exceed the established three percent limit. Overall, the bill seeks to create a more predictable and sustainable framework for workers' compensation benefits in Washington.

Statutes affected:
Original bill: 51.32.072, 51.08.018