Amazon made no formal comment on a proposal by Washington state regulators to increase its workers’ compensation insurance premiums to better reflect a higher level of injury claims in its fulfillment centers.
The Washington Department of Labor and Industries (L&I) has proposed a new risk classification specifically for fulfillment centers, removing them from the broader warehousing classification. The proposal would raise workers’ compensation insurance rates for fulfillment centers 15% next year, while rates for other warehouses would fall 20%.
The state received five written and two oral comments by an Oct. 30 deadline, as part of its rule-making process, all in favor of the proposal.
“The very nature of the business is substantially different than a normal warehouse,” wrote Robert Mitchell of the Washington Food Industry Association, which represents independent grocery and convenience stores and suppliers. He added, “Non-automated warehouse businesses should not be offsetting the rates for automated fulfillment centers.”
L&I insurance actuaries noticed that between 2014 and 2018, Amazon fulfillment centers saw a marked increase in workers’ comp claims, while general merchandise warehouses and grocery distributors saw claim frequency trend downward.
That bolsters reporting by Reveal from The Center for Investigative Reporting, citing internal Amazon safety data and federal workplace injury reports, indicating that injury rates in Amazon fulfillment centers have increased in recent years, and were nearly twice the industry average in 2019.
The new proposed fulfillment center risk classification — watched closely by insurance industry professionals and regulators beyond Washington — distinguishes these modern e-commerce facilities from other warehouses by their speed, level of automation and that they send orders directly to customers.
Amazon is the only company expected to have facilities in the new risk classification, at least initially. The company has five of its large fulfillment centers in Washington. It has at least 19 other logistics facilities in the state; it’s not clear whether they would also be included in the new classification.
A decision on the proposed fulfillment center risk classification is scheduled for Nov. 30. It would take effect Jan. 1, if adopted, a spokesperson for L&I said.