(1) No incarcerated individual compensated for work in correctional industries shall be considered as an employee, or to be employed by the state or the department.

(2) Incarcerated individuals working in Classes I, II, and IV of correctional industries are eligible for industrial insurance benefits as provided by Title 51 RCW.

(3) Incarcerated individuals performing Class V community restitution work will be made eligible for industrial insurance benefits as provided for by RCW 51.12.045.

(4) Incarcerated individuals working in Class III industries are ineligible for industrial insurance benefits.

(5) The department will pay the department of labor and industries all workers' compensation premiums due under Title 51 RCW for workers providing services in Classes IV and V. Recipients must reimburse the department for all such workers' compensation premiums under Title 51 RCW. Except that, recipients will not pay the department for any L&I premiums paid for workers providing goodwill services.