Report: Amazon's Claim Frequency Drives Proposal for New Classification

Friday, October 23, 2020 | 0

Regulators in Washington state are considering what would effectively be a separate industrial classification for Amazon’s fulfillment centers because the volume of claims from the facilities is driving up rates for all warehouses, according to a report by the Seattle Times.

The Washington State Department of Labor and Industries is proposing to create a new classification for fulfillment centers that will be different from warehouses.

Amazon’s fulfillment centers are currently covered by the warehouse classification. The average cost of workers’ compensation insurance for warehouses increased in 2020 to $1.8898 per hour from $1.5978 in 2019.

Under the department’s proposal, the rate for fulfillment centers would increase to $2.1733 in 2021. Meanwhile, the rate for all other warehouses would drop to $1.5142.

Michael D. Ratko, deputy assistant director of the Insurance Services Division at L&I, told the Seattle Times that the agency’s review of the warehouse classification found evidence that fulfillment centers were more hazardous and were submitting claims more often than other businesses. Ratko also said that at the moment, “Amazon is the only business that would be covered under the new risk class.”

According to the report, injury rates at Amazon’s facilities more than tripled from 4 claims per 100 full-time employees in 2014 to 15 claims per 100 workers in 2018. Over the same period, frequency at all other facilities covered by the warehouse classification fell from 11.5 claims per 100 workers in 2014 to about 10 claims per 100 workers in 2018.

L&I is holding two virtual hearings on its 2021 rate proposal, at 10 a.m. Oct. 27 and Oct. 29. More information about the proposal and how to attend the hearings is here.

L&I is accepting comments until 5 p.m. Oct. 30. Comments can be mailed to Jo Anne Attwood, administrative regulations analyst, P.O. Box 41448, Olympia, WA 98504-4148 or sent by email to JoAnne.Attwood@Lni.wa.gov.