What is a cost of living adjustment?

A cost of living adjustment (COLA) is a feature of workers compensation law in Washington that allows injured workers to receive an increase in benefit payments every year to keep up with inflation. This means that these payments may increase over time to keep up with the increasing cost of living. Under workers compensation law in Washington, the Washington State Department of Labor & Industries must review the cost of living every year and determine the cost of living index which is used to calculate the COLA each year. These cost of living increases will help to ensure that injured workers receive the same purchasing power over time as the cost of living continues to rise. If an employee is awarded a COLA, and their benefits are adjusted accordingly, the adjustment will continue for the life of their injury until the employee returns to work or reaches retirement age. The amount of money paid out to the injured worker will vary based on the amount of benefits and the length of time the employee has been out of work. In essence, a COLA helps injured workers maintain their purchasing power in spite of inflation. This adjustment helps to ensure that workers are still able to support their families and that they do not suffer an additional financial burden due to an injury or illness.

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