North Dakota's worker insurance rates will rise an average of 6 percent in July, an increase that was pared back after businesses complained an initial rate proposal was too onerous.

The change, endorsed Wednesday by the board of directors of North Dakota's Workforce Safety and Insurance agency, includes dividend credits for businesses that draw less money from the insurance fund than they pay in premiums.

It taps the agency's financial reserves for $1.7 million to soften the premium increase. Robert Indvik of Bottineau, chairman of the Workforce Safety board, said he believed the agency's investment earnings justified the move.

"Our return has been fairly significant, and it appears like it's going to be fairly stable," Indvik said. "We believe we should share some of our investment return with our stakeholders."

The agency sells insurance against worker injuries on the job. Employers are required to buy coverage, which includes payments for workers' medical treatment, rehabilitation and lost wages. In exchange, workers are barred from suing their employers for an injury on the job.

The agency first proposed an average rate rise of 9 percent, with a minimum increase of 4 percent and a maximum of 14 percent.

At a hearing last month, business representatives argued the proposed increases were too steep. The final rate schedule includes lessened increases - an average of 6 percent, and a range of 1 percent to 11 percent.

Indvik and Charles "Sandy" Blunt, the worker insurance agency's chief executive officer, said the increases would be eased by the dividend payments.

Businesses that pay more than the minimum $125 annual premium, and have paid more in premium costs during the last three years than they have taken out in claims, will be eligible for a 5 percent dividend.

Workforce Safety and Insurance has 19,600 accounts, of which about 3,500 pay the minimum premium, said Tammy Dolan, an agency vice president for finance. Aside from the minimum-payment accounts, only about 600 businesses will not be eligible for a dividend, she said.

Dave MacIver, president of the Greater North Dakota Association, the state's chamber of commerce, said he was pleased by the board's willingness to scale back the rate increase.

"They made the right choice. I think they made a responsible decision," MacIver said. "I also think it shows the board is listening to the business community, and that is important to us."

Businesses will pay the new rates on the first $18,500 of each employee's annual wages, an increase from the present wage base of $18,000. Insurance rates are set for each of 141 employer classes, from coal miners to law enforcement officers and nursing home aides, according to each occupation's risk and claims history.