Amazon warehouse injuries justify higher insurance premiums, Washington workers’ comp official says

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Workers’ compensation officials in Amazon’s home state of Washington have proposed creating a new risk category for employees at the company’s highly-automated warehouses, who have reported on-the-job injuries at a higher rate than other warehouse workers for several years in a row.

If the new risk classification goes into effect, workers’ comp insurance premiums for Amazon’s e-commerce warehouses, known as fulfillment centers, would increase 15% to $2.17 per employee hour in 2021. At that rate, the fulfillment center category would cost more to insure than over 260 other Washington business categories, including mechanized logging operations, law enforcement agencies and meatpacking plants.

With Amazon out of the equation, most other Washington-based warehouse operations – which have fewer workers’ comp claims on average – would see premiums go down about 20% to $1.51 per employee hour in 2021.

The Washington Department of Labor & Industries (L&I), which administers workers’ comp benefits to people who are injured or fall ill on the job, noticed in 2019 that Amazon fulfillment centers were making up a growing share of injury claims and insurance costs within the warehousing industry, according to the Seattle Times. As a result, premiums for all companies in the industry rose, effectively subsidizing Amazon’s higher rate of injuries and illnesses its workers reported.

“Further review of the warehouse classification concluded that fulfillment centers were more hazardous and were submitting claims more often,” Michael D. Ratko, deputy assistant director of L&I’s Insurance Services Division, told the Seattle Times. That justifies putting fulfillment centers in the proposed risk class of their own, he said.

Overexertion, repetitive motion, falls and being struck by an object are the most common causes of injuries in Amazon’s fulfillment centers, according to the Seattle Times. Although injuries in warehouses are similar, “there are just more of them” in fulfillment centers, Ratko said.

A recent report by Reveal from The Center for Investigative Reporting found a 33% jump in the injury rate at more than 150 fulfillment centers from 2016 to 2019. Amazon’s fulfillment center in DuPont, Washington had the highest level of injuries in at any of the company’s fulfillment centers in 2019.

The higher rate of workers’ comp claims from Amazon is “indicative of the kind of work that happens inside the fast-paced fulfillment center model,” Brenda Wiest, vice president and legislative director at Teamsters Local Union No. 117 and a member of L&I’s workers’ comp advisory committee, told the Seattle Times.

Wiest, whose union represents 18,000 workers in King and Pierce counties, said there was “no real check to the power of the employer … no way to hold the employer accountable to make change,” noting the high rates of turnover at Amazon fulfillment centers during the pandemic.

If L&I goes forward with the proposed changes, workers’ comp officials in other states could follow suit, according to labor economists.

“The Washington system is very progressive,” Allan Hunt, a retired economist with the Upjohn Institute who focused on workers’ compensation issues, told Bloomberg News. “There are other progressive jurisdictions in the U.S. that would likely entertain a similar policy move if it goes through.”


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