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L&I COLA. Cost of Living Adjustment

The L&I COLA for 2021 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. For claims whose right to compensation was established on or after July 1, 2011, no adjustment shall be made under this subsection until the second July 1st following the date of injury or occupational disease manifestation. Your COLA will start the July 1st following the date of your injury.

What is a COLA?

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).

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 2020 maximum time loss rates will increase to $6,970.00, which is 120% percent of the state’s average monthly wage.

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 (July 1) 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?

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.

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. The new monthly benefit is based on a maximum of 120 percent of the state’s average monthly wage, for workers injured after June 30, 1996.

Most workers with an injury date between July 1, 2019 and June 30, 2020, will receive their first 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.

How to Contact Us:

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

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