1. US Payroll Implementation Guide
  2. Washington Industrial Insurance

Washington Industrial Insurance

To comply with government regulations, all employers must provide industrial insurance coverage for all of their employees who work within the state of Washington. Industrial insurance is similar to Workers' Compensation, and is calculated and tracked by using many of the Workers' Compensation programs, fields, and tables.

Typically, industrial insurance premiums are paid by employers and employees. However, employers have the option of paying the employee-paid portion of the premium for their employees. The amount of the premium is determined by the risk classifications that are assigned to the business by the state of Washington. There are approximately 300 risk classifications. Each classification represents a business activity and is associated with a state-specified rate. This rate is the composite rate and is comprised of these components:

  • Accident fund premium, which is paid by the employer.

  • Medical premium, which can be paid by the employer and the employee.

  • Supplemental pension assessment, which can be paid by the employer and the employee.

The industrial insurance premium total for each employee is determined by multiplying the number of hours that the employee works by the composite rate that is associated with the employee's risk classification. An employee might work in multiple risk classifications during a pay period.

Only the hours that are actually worked by an employee should be used to calculate the industrial insurance premium. Sick, vacation, holiday, and other leave hours should not be included in the number of hours worked. Additionally, each hour of overtime that an employee works should be treated as one hour for calculation purposes. The employer has the option to pay both the employer and the employee portion of the premium.

The state of Washington issues rate notices to employers. The notice includes this information:

  • The risk classification codes that are associated with the employer's business.

  • The composite rates for each risk classification that is assigned to the employer's business.

    Note: Industrial insurance coverage is mandatory for most employees who work in Washington. However, some occupations and circumstances might exempt some employees from coverage. Contact the local taxing authority for additional information about industrial insurance exemptions.