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L&I COLA. Cost of Living Adjustment

The L&I COLA for 2021 -2022 will be 10.1%.

This is a welcome and significant increase in benefits for injured workers. This yearly L&I COLA increase is determined by the yearly change in the Washington State average weekly wage (AWW).

The Average Weekly Wage is higher than normal this year because many low paying jobs were lost in Washington State due to the pandemic. Because fewer low paying jobs existed and were covered by unemployment insurance last year, this raised the average wage.

Enjoy the increase this year but don’t count on anything like it in the next two years. This AWW will fall in the future when the lost low paying jobs return to the economy.

Who gets a COLA?

Most workers currently receiving Washington workers’ compensation time loss or pension benefits receive a cost-of-living increase effective July 1 each year.

The increase also applies to pension benefits paid to family members of those who died because of a work-related accident or disease.

There is no COLA for the first year of your claim. No COLA until the second July 1st following the date of injury or occupational disease manifestation. Your COLA will start the second July 1st following the date of your injury.

What is an L&I  COLA? Washington State L&I Cost of Living Adjustment

A COLA is a cost of living adjustment. Washington State law requires that benefit amounts be recalculated each year to reflect the change in the state’s average wage from the previous calendar year. The results of this recalculation is the annual cost of living adjustment (COLA). The COLA takes effect on your claim’s second July 1st and each July 1st thereafter.

Do I need to ask for the COLA?

You should not need to ask for the COLA, and you should not have to hire an attorney to get a COLA. The Department of Labor and Industries will automatically calculate your adjustment. You will see the adjustment after July 1, and usually no later than August 15 for all of time loss or pension benefits from July 1 going forward.

If your claim is covered by a Self Insured employer the Third Party Administrator will automatically calculate your COLA. If you don’t receive your COLA increase automatically from the Third Party Administrator, contact the Self Insured Section of L&I and ask them to help.  You can ask the Self Insured Section to issue a penalty for any late COLA payment.

Is There a Maximum Time Loss Rate?

Yes there is.

High wage earners are capped out at the maximum rate. In 2021 maximum time loss rates will increase to $7,674.09, which is 120% percent of the state’s average monthly wage. Said another way, if you were a high wage earner when you were injured, then the COLA does not apply to you, rather the maximum time loss rate applies.

What if I receive Social Security Benefits, will I still get a COLA?

When a worker is receiving a check from L&I and is also on social security disability, they may or may not receive a cost of living increase every year.

Based on the claimant’s wages, they either receive a cost of living increase once a year on July 1st and/or their claim is reviewed once every three years.

Federal law allows the department to review the combined benefit amount every three years to determine whether the income should increase to reflect more current wage levels.

How does L&I determine how much the COLA will be?

Your L&I wage rate is set early in your claim. Washington’s workers’ compensation law provides that injured workers receive from 60 to 75 percent of their income, up to the legally set maximum, tax free, while they are physically unable to work. L&I sets your rate by issuing an order.

The COLA recalculation of benefits is based on the average annual wage of all workers in Washington. That wage, is calculated by the employment Security Department. That percentage figure is multiplied by your L&I wage rate.

Most workers with an injury date before June 30, 2020, will receive a COLA on July 1, 2021.

COLA History

Year                     COLA Increase

2021 10.1%
2020 6.7%
2019 6.5%
2018 4.9%

Want More L&I Information?

We know L&I law and procedure. We share this information with you in the links below.

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Telephone – Call for information or a free strategy session – 206-343-1988

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