WSR 22-19-099

PROPOSED RULES

DEPARTMENT OF

LABOR AND INDUSTRIES

[Filed September 21, 2022, 10:43 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 22-11-080.

Title of Rule and Other Identifying Information: Transportation network companies. New sections in chapter 296-128 WAC.

Hearing Location(s): On November 1, 2022, at 1:00 p.m., at the Department of Labor and Industries (L&I) Service Location, 12806 Gateway Drive South, Tukwila, WA 98168; on November 2, 2022, at 1:00 p.m., at L&I Service Location, 312 S.E. Stonemill Drive, Suite 120, Vancouver, WA 98684; and on November 4, 2022, at 9:00 a.m., virtual/telephonic meeting. Join Zoom meeting at https://lni-wa-gov.zoom.us/j/89814993126?pwd=ODQraDZiKzk5TVJYRjErdjR6QnJYUT09; join by phone 253-215-8782, Meeting ID 898 1499 3126, Passcode EmpStds22#. The meetings will begin at the time indicated, and will continue until all oral comments are received.

Date of Intended Adoption: November 22, 2022.

Submit Written Comments to: Bridget Osborne, L&I, Employment Standards, P.O. Box 44540, Olympia, WA 98504-4510, email ESRules@Lni.wa.gov, fax 360-902-5300, by November 7, 2022, by 5 p.m.

Assistance for Persons with Disabilities: Contact Bridget Osborne, phone 360-902-5552, fax 360-902-5300, email ESRules@Lni.wa.gov, by October 24, 2022.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The Washington state legislature passed ESHB 2076 during the 2022 legislative session. ESHB 2076 sets new requirements for transportation network companies and gives drivers new rights and protections. Section 1 (13)(f) of ESHB 2076, now codified in RCW 49.46.300 (1)(13)(f), requires L&I to conduct rule making regarding the reimbursements from the newly created driver resource center to a transportation network company for costs associated with deduction and remittance. Additional rules are needed to clarify the new requirements for transportation network companies and new driver protections relating to minimum compensation, paid sick time, retaliation and deactivations, and administrative violations. Rules are also needed to carry out and enforce the new requirements and help L&I coordinate with the driver resource center.

This rule making proposes to create new rule sections and will not change any existing rules.

Reasons Supporting Proposal: Section 1 (13)(f) of ESHB 2076, now codified in RCW 49.46.300 (1)(13)(f), requires L&I to conduct rule making. Additional rule making has been determined to be the best approach to outline the transportation network company's compliance requirements relating to driver payments, electronic receipts, deductions, deactivations, notices, paid sick time, and the department's enforcement capabilities. The proposed rules also provide clarity for drivers on their new protections.

Statutory Authority for Adoption: Chapter 49.46 RCW; RCW 43.22.270.

Statute Being Implemented: RCW 49.46.210, 49.46.300 through 49.46.350.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: L&I, governmental.

Name of Agency Personnel Responsible for Drafting: Bridget Osborne, Tumwater, Washington, 360-902-5552; Implementation: Cristina Evans, Tumwater, Washington, 360-485-2965; and Enforcement: Bryan Templeton, Tumwater, Washington, 360-902-5310.

A school district fiscal impact statement is not required under RCW 28A.305.135.

A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Bridget Osborne, L&I, Employment Standards, P.O. Box 44540, Olympia, WA 98504-4510, phone 360-902-5552, fax 360-902-5300, email ESRules@Lni.wa.gov.

This rule proposal, or portions of the proposal, is exempt from requirements of the Regulatory Fairness Act because the proposal:

Is exempt under RCW 19.85.025(3) as the rules are adopting or incorporating by reference without material change federal statutes or regulations, Washington state statutes, rules of other Washington state agencies, shoreline master programs other than those programs governing shorelines of statewide significance, or, as referenced by Washington state law, national consensus codes that generally establish industry standards, if the material adopted or incorporated regulates the same subject matter and conduct as the adopting or incorporating rule.

Is exempt under RCW 34.05.328 (5)(c)(ii).

Explanation of exemptions: See table in Section 2 below.

Scope of exemption for rule proposal:

Is partially exempt:

Explanation of partial exemptions:

The proposed rule does impose more-than-minor costs on businesses.

Small Business Economic Impact Statement (SBEIS)

1. Describe the proposed rule, including: A brief history of the issue; an explanation of why the proposed rule is needed; and a brief description of the amendments in this proposal that would impose new or additional costs on affected businesses, including small businesses. The Washington state legislature passed ESHB 2076, now codified under chapter 49.46 RCW during the 2022 legislative session, which sets new requirements for transportation network companies (TNCs) and gives drivers new rights and protections.

Section 1 (13)(f) of ESHB 2076, now codified in RCW 49.46.300 (1)(13)(f), requires L&I to conduct rule making regarding the reimbursements from the driver resource center to TNCs for costs associated with deduction and remittance. Additional rules are needed to clarify the new requirements for TNCs and new driver protections relating to minimum compensation, paid sick time, retaliation and deactivations, and administrative violations. Rules are also needed to carry out and enforce the new requirements and help L&I coordinate with the driver resource center. This rule making does not make any changes to the existing rules in chapter 296-128 WAC that apply to "employees" covered under the Minimum Wage Act.

The proposed rules that may impose new or additional costs on businesses are related to: The requirements of providing "preferred language"; driver receipts and weekly trip notices; deactivations; notice of rights; and paid sick time notifications.

2. Identify which businesses are required to comply with the proposed rule using the North American Industry Classification System (NAICS). The requirements of ESHB 2076 are limited to those companies that meet the definition of TNCs in RCW 49.46.300 (1)(v):

"Transportation network company" has the same meaning as defined in RCW 46.04.652. A TNC does not provide for hire transportation service. RCW 46.04.652 defines a "transportation network company" as "a corporation, partnership, sole proprietorship, or other entity that operates in this state, and uses a digital network to connect passengers with TNC drivers to provide prearranged rides."

The proposed rules are intended to implement requirements of ESHB 2076. Therefore, all businesses who meet the definition in RCW 49.46.300 (1)(v) are required to comply with the proposed rule. Table 1 below shows the NAICS code that TNCs most likely fall under and the best estimate of the total numbers of TNCs and workers that may be affected by these rules.

Table 1: The Affected Industry, Establishments, and Workers

This NAICS code data does not distinguish between companies who meet the definition of TNC in the statute and those that do not.

3. Identify and analyze the probable costs to comply with the proposed rule. The probable costs analyzed included both the following required and optional elements of the proposed rule.

3.2.1 Quantifiable costs of the rule amendments: There are two categories of rule amendments whose cost impacts are quantified in this analysis: (1) The preferred language requirement under WAC 296-128-99010(3); and (2) the provisions of various notices to drivers under multiple sections.

WAC 296-128-99010(31) "Preferred language" definition: Rule Overview: This proposed rule defines the term "preferred language" used in the rules and provides that a TNC must make good faith effort to learn the language and must translate documents via an accessible system when the preferred language is identified as the preferred language of at least two percent of drivers who use the TNC's platform in Washington. The definition applies to the requirements for an "accessible system" as defined in WAC 296-128-99010(1).

Costs: L&I's proposed "preferred language" definition, which applies to substantially similar notices for drivers as in Seattle's Transportation Network Company Driver Minimum Compensation Ordinance, includes a two percent threshold of languages spoken by drivers. This is more lenient than language access requirements TNCs are currently required to follow under Seattle's ordinance.

There may be a few TNCs not currently covered by Seattle's ordinances who will now be subject to the proposed rule. Costs for routine business translation range from $20 to $60 for translation of one million characters per month, and can go as high as $75 for custom translation. For more sensitive documents such as deactivation notices and other legal documents, certified human translation is available for the price ranging from $20 to $29 per page.3

Assuming the number of the unidentified TNCs that are not covered by Seattle and King County's ordinances is no more than the number of TNCs that are currently identified by L&I, and they chose services at the upper end of the price spectrum, the total costs would be as follows:

WAC 296-128-99030 Electronic driver receipts and weekly trip notices, 296-128-99110 Notice of rights, and 296-128-99210 Paid sick time notifications: Rule Overview: RCW 49.46.300 (8) and (10) require TNCs to provide itemized reporting in both driver receipts and weekly trip notices. This proposed rule requires TNCs to include itemized information on driver receipts as well as itemized information, including total passenger platform time performed within the past 365 calendar days, on weekly trip notices. This information is needed to confirm a TNC's compliance with compensation and paid sick time requirements under the statute. All but two of the itemized reporting requirements are included in the statute itself. The only additional data added to these requirements through rule are the requirement to report pickup and drop off location data, which is data already collected and included on passenger receipts, and the total amount of passenger platform time in the past 365 calendar days.

This proposed rule clarifies the requirement for TNCs to provide drivers with a notice of rights. The proposed rules include a requirement to maintain a driver's access to the notice of rights for at least three years. The rule also clarifies the TNC requirement to provide drivers with paid sick time notifications.

Costs: Given that L&I is committed to developing and providing sample notices for TNCs, L&I anticipates the compliance costs would not be substantial if TNCs chose to utilize L&I's notices. After discussing with its internal IT experts, L&I estimates that creating all these notices will cost an IT specialist no more than eight hours. Using the average hourly cost of $72.52 for a typical computer professional in Washington state6 and a maximum of seven companies that are subject to these requirements, the total one-time cost will be no more than $4,061.

3.2.2 Unquantifiable costs of the rule amendments: The following amendments either impose no new costs on the TNCs, or the costs of the amendments are negligible and, therefore, need not be quantified in this report.

WAC 296-128-99010(2) "Accessible system" definition: Rule Overview: The proposed rule defines the term "accessible system." An accessible system requires, in part, the use of a driver's preferred language, as defined in WAC 296-128-99010(31). Drivers must receive information in an accessible way in order to ensure their rights have not been violated.

Costs: The only prescriptive portion of the rule is the requirement for use of a driver's preferred language. This requirement is covered in the cost evaluation of WAC 296-128-99010(31).

WAC 296-128-99010(4) "Communication system" definition: Rule Overview: The proposed rule defines the term "communication system." A "communication system" ensures drivers receive important information to ensure their rights have not been violated, but does not include all of the requirements of an "accessible system."

Costs: Converting files to a comma-separated values file format is a routine computer activity. It presents no cost with saving a document in any other format. Therefore, it creates no new costs.

WAC 296-128-99040 Payment requirements: Rule Overview: This proposed rule clarifies pay requirements including pay intervals with which TNCs must comply. L&I's proposed rule specifies that payment intervals must occur at least biweekly which is less frequent than current practice by TNCs, who already pay more frequently. L&I's proposed rule on payment intervals does not require TNCs to pay additional compensation to drivers, so there is no cost to the rule.

Costs: L&I's proposed rule does not contain the same monthly payment interval contained in the rule that applies to employees as a payment interval option. See WAC 296-128-035. This recognizes that the drivers are not salaried employees. Hourly workers or workers paid on a work-performed basis are not typically paid on a monthly basis. TNC's current pay practices do not include a monthly payment option. Because the requirement is no more restrictive than the current practice of TNCs, there are no new costs associated with this rule.

WAC 296-128-99080 Deductions from driver compensation: Rule Overview: This proposed rule clarifies which voluntary deductions from driver compensation are allowable, including what written authorization information is needed from a driver prior to a deduction being made. The written authorizations of deduction do not create new requirements for TNCs beyond what is provided in the statute. The information provided in written authorizations for deductions is provided by the driver if they elect to request a deduction. This is a discretionary rule that is only applicable if TNCs choose to allow for voluntary deductions. This rule also clarifies that deductions for loss or breakage are not allowable. This proposed rule language is based on existing deduction WAC 296-126-028, which applies to most employees. L&I's proposed rule language is consistent with existing rules and only clarifies what deductions can and cannot be taken from a driver's wages without creating new requirements for TNCs. Further, this is a discretionary rule that is only applicable if TNCs allow for voluntary deductions, and thus there is no required cost associated with the rule.

Costs: This is a rule that is only applicable if/when TNCs choose to allow for voluntary deductions, so there is no required cost associated with the rule.

WAC 296-128-99090 Voluntary per trip earnings deduction contributions and reimbursements—Driver resource center: Rule Overview: This proposed rule enacts the requirement from the statute for TNCs to provide an opportunity for drivers to make voluntary per trip earnings deduction contributions to the driver resource center, if the TNC has 100 or more drivers authorize such a deduction. It provides the process for administering such contributions through deductions and it provides for the reimbursement process to TNCs that seek reimbursement. The information provided in written authorizations for deductions is provided to the driver if they elect to request a deduction and if the driver resource center chooses to accept the voluntary contributions.

Costs: The portions of the rule beyond statutory requirements are discretionary, so there is no required cost associated with the rule.

WAC 296-128-99100 Deactivations: Rule Overview: This proposed rule clarifies what information must be included in deactivation notifications provided by a TNC to a driver when deactivated. L&I's proposed rule related to deactivation notifications is substantially similar to the deactivation notification required under Seattle Office of Labor Standards' rules passed under the Transportation Network Company Driver Minimum Compensation Ordinance, with which most TNCs are already required to comply. L&I's proposed rule includes the additional requirement to notify drivers of their ability to use paid sick time and the estimated end date of the deactivation.

Costs: There may be negligible and unquantifiable costs associated with providing this additional information on account deactivation notifications. There may be a small number of TNCs not currently covered by Seattle's ordinance. We currently lack sufficient data to determine if these TNCs will have more significant fiscal impacts from this requirement than TNCs covered by the ordinance. Deactivation notices include preferred language requirements; those costs have been estimated above.

WAC 296-128-99160 Reasonable notice: Rule Overview: This proposed rule clarifies that a TNC may not require advanced notice of paid sick time use from a driver for an authorized purpose under RCW 49.46.210. A TNC's request or requirement for advanced notice of paid sick time from a driver is considered an interference with a driver's lawful use of paid sick time.

Costs: The proposed rule does not create a new requirement for TNCs, so there is no cost associated with the rule.

WAC 296-128-99180 Verification for paid sick time usage: Rule Overview: This proposed rule clarifies requirements when a TNC chooses to verify that a driver's use of paid sick time is for an authorized purpose under the statute.

Costs: TNCs are not required to verify the use of paid sick time. Verification is optional, thus there is no required cost to the proposed rule.

WAC 296-128-99230 Driver use of paid sick time for unauthorized purposes: Rule Overview: This rule allows withholding payment for unauthorized purposes and requires a TNC to provide notification when choosing to withhold the payment.

Costs: Because verifying sick leave and withholding the payment is discretionary, there is no cost created by the notification unless the TNC chooses to exercise this option.

WAC 296-128-99240 Enforcement—Complaints by driver—Additional investigations by department for amounts owed to drivers: Rule Overview: This proposed rule clarifies L&I's enforcement authority to investigate compensation-related complaints. The proposed rule grants L&I the ability to request that a TNC perform a self-audit to mitigate potential burden and costs associated with investigations. Self-audits are intended to be a less burdensome and less costly alternative to extensive document and information production during investigations. If self-audits are performed during an investigation, it may also reduce investigative timelines. The proposed rules also grant L&I the ability to require TNCs to notify drivers that L&I is conducting an investigation. This would only occur if allegations of a violation are brought forward. If the department does not receive complaints of potential violations, this rule requirement will not be applicable. Requiring TNCs to provide this notification to drivers is a less burdensome alternative to TNCs needing to respond to multiple individual complaints and the rule is an attempt to reduce the number of separate complaints to which TNCs and the department must respond.

Costs: Self-audits and notifications to drivers using previously mandated systems are intended to mitigate potential costs associated with the normal process of investigations, thus there is no cost associated with the rule.

WAC 296-128-99250 Enforcement—Remittances: Rule Overview: This proposed rule clarifies L&I's enforcement authority to investigate if the department receives information suggesting that a TNC may have violated the remittance provisions of RCW 49.46.330. The proposed rule grants L&I the ability to request that a TNC perform a self-audit to mitigate potential burden and costs associated with investigations. Self-audits are intended to be a less burdensome and less costly alternative to extensive document production during investigations. If self-audits are performed during an investigation, it may also reduce investigative timelines.

Costs: Self-audits are intended to mitigate potential costs associated with the normal process of investigations, thus there is no cost associated with the rule.

WAC 296-128-99260 Enforcement—Complaint by driver—Paid sick time: Rule Overview: This proposed rule clarifies L&I's enforcement authority to investigate paid sick time-related complaints. The proposed rule grants L&I the ability to request that a TNC perform a self-audit to mitigate potential burden and costs associated with investigations. Self-audits are intended to be a less burdensome and less costly alternative to extensive document production during investigations. If self-audits are performed during an investigation, it may also reduce investigative timelines. The proposed rules also grant L&I the ability to require TNCs to notify drivers that L&I is conducting an investigation. This would only occur if allegations of a violation are brought forward. If the department does not receive complaints of potential violations, this rule requirement will not be applicable. Requiring TNCs to provide this notification to drivers is a less burdensome alternative to TNCs needing to respond to multiple individual complaints and the rule is an attempt to reduce the number of separate complaints to which TNCs and the department must respond.

Costs: Self-audits and notifications to drivers using previously mandated systems are intended to mitigate potential costs associated with the normal process of investigations, thus there is no cost associated with the rule.

WAC 296-128-99270 Enforcement—Retaliation investigations: Rule Overview: This proposed rule clarifies L&I's enforcement authority to investigate retaliation-related complaints. The proposed rules also grant L&I the ability to require TNCs to notify drivers that L&I is conducting an investigation. This would only occur if allegations of a violation are brought forward. If the department does not receive complaints of potential violations, this rule requirement will not be applicable. Requiring TNCs to provide this notification to drivers is a less burdensome alternative to TNCs needing to respond to multiple individual complaints and the rule is an attempt to reduce the number of separate complaints to which TNCs and the department must respond.

Costs: Notifications to drivers using previously mandated systems are intended to mitigate potential costs associated with the normal process of investigations, thus there is no cost associated with the rule.

WAC 296-128-99280 Enforcement—Administrative violations: Rule Overview: This proposed rule clarifies L&I's enforcement authority to investigate administrative violation-related complaints. The proposed rules also grant L&I the ability to require TNCs to notify drivers that L&I is conducting an investigation. This would only occur if allegations of a violation are brought forward. If the department does not receive complaints of potential violations, this rule requirement will not be applicable. Requiring TNCs to provide this notification to drivers is a less burdensome alternative to TNCs needing to respond to multiple individual complaints and the rule is an attempt to reduce the number of separate complaints to which TNCs and the department must respond.

Costs: Notifications to drivers using previously mandated systems are intended to mitigate potential costs associated with the normal process of investigations, thus there is no cost associated with the rule.

The cost-benefit analysis (CBA) is available on the L&I website or it may be obtained by contacting Bridget Osborne at phone 360-902-5552, email ESRules@Lni.wa.gov.

4. Determine whether or not the proposed rule may impose a disproportionate impact on small businesses compared to the 10 percent of businesses that are the largest businesses required to comply with the proposed rule. Under the Regulatory Fairness Act (RFA), "'Small business' means any business entity, including a sole proprietorship, corporation, partnership, or other legal entity, that is owned and operated independently from all other businesses, and that has fifty or fewer employees," RCW 19.85.020(3).

Based on the best information available, most or all of the existing TNCs do not qualify as small businesses based on their nondriver employees. However, it is unclear if drivers count towards the employee totals in the definition of small business, because ESHB 2076 defines "drivers" separately from employees for the purposes of chapter 49.46 RCW and RCW 19.85.025 does not specifically define "employees." For these reasons, and for the purposes of determining applicability under RFA, L&I makes the conservative assumption that TNCs operating in Washington state might include small businesses as defined under RCW 19.85.020 even though the majority of them are large employers. Based on the costs estimated in the preliminary CBA, we have calculated costs and less-than-minor costs, assuming costs are equally shared in Table 1 below.

As analyzed above, we estimate the proposed rule will impose a one-time cost of $4,061 and an annual cost of $87,500 across all the affected businesses. If we assume these costs are evenly borne by the seven companies that are possibly uncovered by the local ordinances, the average one-time cost is $580 and the ongoing cost is $12,500 per business per year. When compared to the minor cost threshold (max of one percent of annual payroll or 0.3 percent of annual revenue), this analysis indicates the average per-business cost of the proposed rule is likely below the threshold for affected businesses discussed above. Accordingly, an SBEIS would not be required for this rule making pursuant to RCW 19.85.030(1). However, as discussed below, L&I has taken additional steps to meet the requirements of RCW 19.85.040 if L&I's cost analysis does not capture all the costs associated with the proposed rules.

In the alternative, the department assumed there would be disproportionate impacts on small businesses (if any of the smaller TNCs qualify as a small business) due to the absence of data confirming that no small businesses will be impacted by the rules and insufficient information to otherwise determine the cost impact if the costs are not equally shared. As such, this document meets the requirements of an SBEIS. As required by RCW 19.85.030 and 19.85.040, in the absence of this data, the department identified cost-mitigation measures, where legal and feasible, as described below.

5. If the proposed rule is likely to impose a disproportionate impact on small businesses, identify the steps taken to reduce the costs of the rule on small businesses. As discussed above, L&I does not have sufficient data to conclude that the rules will have disproportionate impacts, so instead will consider mitigation steps in RCW 19.85.030(2). Because at least two of the TNCs are not small businesses, RCW 19.85.030(3) does not apply. See RCW 19.85.030(3) (If a proposed rule affects only small businesses, the proposing agency must consider all mitigation options defined in this chapter). However, L&I considered the list of methods for reducing the impact on small businesses under RCW 19.85.030(2), and is taking the following steps to reduce the costs of the rules on small businesses:

WAC 296-128-99010(2) "Accessible system" definition: The only prescriptive portion of the rule is the requirement for use of a driver's preferred language. This requirement is covered in the cost evaluation of WAC 296-128-99010(31) (below). The rule does also not prescribe a particular IT system or program that must be used to meet the accessible system requirements, allowing for TNCs to use their existing systems, or whatever system works best for their business model. This flexibility is particularly important and helpful to small businesses, as they normally lack the IT resources that their larger counterparts possess. See RCW 19.85.030 (2)(a), (b).

WAC 296-128-99010(4) "Communication system" definition: Converting files to a comma-separated values file format is a routine computer activity. It presents no cost with saving a document in any other format. Therefore, it creates no new costs. The rule does not prescribe a particular IT system or program that must be used to meet the communication system requirements, allowing for TNCs to use their existing systems, or whatever system works best for their business model. This flexibility is particularly important and helpful to small businesses, as they normally lack the IT resources that their larger counterparts possess. See RCW 19.85.030 (2)(a), (b).

WAC 296-128-99010(31) "Preferred language" definition: In order to mitigate costs associated with translations and other potential language access-related costs, the proposed rule includes a two percent threshold of languages spoken by drivers. This is intended to mitigate the potentially high cost of translating notices into all languages, particularly for small businesses. So if small businesses do not have at least two percent of drivers who speak more than the top five languages spoken in the state, they would not be required to provide notifications in any additional languages than statutorily required. See RCW 19.85.030 (2)(a), (b).

WAC 296-128-99030 Electronic driver receipts and weekly trip notices: All but two of the itemized reporting requirements in the proposed rule are included in the statute itself. The only addition added to these requirements through rule is the requirement to report pickup and drop off location data and the total passenger platform time performed within the past 365 calendar days. The rule does not prescribe a particular IT system or program that must be used to generate driver receipts and weekly trip notices, allowing for TNCs to use their existing systems, or whatever system works best for their business model. This flexibility is particularly important and helpful to small businesses, as they normally lack the IT resources that their larger counterparts possess. See RCW 19.85.030 (2)(a), (b).

WAC 296-128-99100 Deactivations: Most of the information required in deactivation notifications is adopted from the statute without material change. The proposed rule includes the additional requirement to notify drivers of their ability to use paid sick time and the estimated end date of the deactivation. The proposed rule is intended to mitigate potential deactivation notification requirements on TNCs, particularly smaller TNCs. This is accomplished by modeling the proposed deactivation notification requirements after substantially similar requirements in Seattle's Transportation Network Company Driver Minimum Compensation Ordinance, which most TNCs are already required to comply with. Additionally, the proposed rule is intended to reduce the burden of potential disputes over deactivations, by ensuring drivers understand why they were deactivated. It is also intended to reduce the number of unnecessary complaints, investigations, and inspections of records by ensuring that drivers have a clear understanding of the end date for their deactivation so they do not file unnecessary appeals or complaints. See RCW 19.85.030 (2)(a), (b), (c).

WAC 296-128-99110 Notice of rights: The proposed rule clarifies the TNC requirements to provide drivers with a notice of rights and includes a requirement to maintain a driver's access to the notice of rights for at least three years. The statute does not specify an end date of when notices must be available to drivers, so the proposed rule is intended to mitigate storage costs by limiting the storage to three years. The rule also intends to mitigate costs through the allowance of an established "accessible system" to meet the manner of distribution requirements. Additionally, in order to help mitigate potential burden of creating a driver's notice of rights, the proposed rule specifies that L&I may provide a sample notice of rights and that a TNC may satisfy its obligation to distribute the written notice of rights by providing the department's sample notice. It is also intended to reduce the number of unnecessary complaints, investigations, and inspections of records by ensuring that drivers have access to their notice of rights. See RCW 19.85.030 (2)(a), (b), (c).

WAC 296-128-99210 Paid sick time notifications: The proposed rule clarifies the TNC requirement to provide drivers with paid sick time notifications. In order to mitigate potential costs associated with translations and other potential language access-related costs, the proposed rules distinguish that the notice of paid sick time rights must be available via an "accessible system," but the monthly notifications may be made available via a "communication system" which does not include the same language access requirements. For the paid sick time notification via an accessible system, which includes language preference requirements, L&I has taken the steps above to mitigate the impacts of language preference requirements. See RCW 19.85.030 (2)(a), (b), (c).

6. Describe how small businesses were involved in the development of the proposed rule. Many of the provisions of ESHB 2076 go into effect January 1, 2023. In order to have rules in place before that date, L&I began a comprehensive rule-making development process in May 2022. As part of the process, L&I reached out to the seven companies currently licensed with the Washington state department of licensing as a TNC, and some may be small businesses. Three of those companies expressed interest in being involved in L&I's implementation efforts. Those three companies, and other stakeholders representing drivers, provided input on predraft versions of the proposed rules. Additionally, L&I will hold three public hearings in November 2022 to seek comments about the proposed rule and all supported analyses from the affected businesses and workers, which provides another opportunity for small businesses to be engaged in the development of the final rule.

7. Identify the estimated number of jobs that will be created or lost as the result of compliance with the proposed rule. L&I lacks credible information or data to estimate how many jobs will be created or lost due to the proposed rule. However, L&I believes that any potential job impact is likely a direct result of ESHB 2076, which granted drivers new substantive benefits, rather than L&I's modest rule making to implement ESHB 2076's substantive protections. L&I does not believe the implementation of these requirements will impose a significant impact on the state job market.

A copy of the statement may be obtained by contacting Bridget Osborne, L&I, Employment Standards, P.O. Box 44540, Olympia, WA 98504-4540, phone 360-902-5552, fax 360-902-5300, email ESRules@Lni.wa.gov.

September 21, 2022

Joel Sacks

Director

OTS-4075.3