S-2142.1  _______________________________________________


                    SUBSTITUTE SENATE BILL 5264



State of Washington      57th Legislature     2001 Regular Session


By Senate Committee on Ways & Means (originally sponsored by Senators Prentice, Fraser, Patterson, Costa, Shin, Kline, Kohl‑Welles, Constantine, Jacobsen, Winsley and Gardner)



Prohibiting public employers from misclassifying employees to avoid providing benefits.

    AN ACT Relating to unfair practices by public employers with respect to eligibility for employment-based benefits; adding a new section to chapter 49.44 RCW; and creating new sections.




    NEW SECTION.  Sec. 1.  The legislature intends that public employers be prohibited from misclassifying employees, or taking other action to avoid providing or continuing to provide employment-based benefits to which employees are entitled under state law or employer policies.

    The legislature intends that public employers should provide all persons who provide services for the employer, and who are in an employer-employee relationship with the employer, with the benefits of the employer-employee relationship.  Health insurance, retirement benefits, sick and annual leave, and other similar employee benefits should be provided on a consistent basis, as defined by state law or employer policies, to all persons who have an employee-employer relationship with a public employer.  Objective standards, such as control over the work and the length of the employment relationship should determine whether a person is an employee who is entitled to employee benefits, rather than the arbitrary application of labels, such as "temporary," or "contractor."  Common law standards, applied in a manner consistent with internal revenue service and department of retirement system guidelines, should be used to determine whether a person is performing services as an employee, as a contractor, or as part of an agency relationship.

    The legislature does not intend to modify or mandate in any way the provision of benefits by this act, but instead intends that public employers apply benefit eligibility rules on an objective basis.  This act specifically is not intended to modify any statute or policy regarding the employment of public employee retirees who work as contractors.


    NEW SECTION.  Sec. 2.  A new section is added to chapter 49.44 RCW to read as follows:

    (1) It is an unfair practice for any public employer to:

    (a) Misclassify any employee to avoid providing or continuing to provide employment-based benefits to which the employee would become or is entitled under any state law or any employer policy; or

    (b) Include any other language in a contract with an employee that requires the employee to forego employment-based benefits to which the employee would become or is entitled under any state law or any employer policy.

    (2) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

    (a) "Employee" means a person who is providing services for compensation to an employer, unless the person is free from the employer's direction and control over the performance of work.  This definition shall be interpreted consistent with guidelines established by the federal internal revenue service, the department of retirement systems' definitions under RCW 41.40.010, and common law.

    (b) "Employment-based benefits" means any benefits to which an employee may become or is entitled under any state law or any public employer written policy.

    (c) "Public employer" means:  (i) Any unit of local government including, but not limited to, a county, city, town, municipal corporation, quasi-municipal corporation, or political subdivision; and (ii) the state, state institutions, and state agencies.  This definition also shall be interpreted consistent with common law.

    (d) "Misclassify" and "misclassification" mean to incorrectly classify or label a long-term public employee as "temporary," "leased," "contract," "seasonal," "intermittent," or "part-time," or to use a similar label that does not objectively describe the employee's actual work circumstances.

    (3) Any employee deeming himself or herself harmed in violation of subsection (1) of this section may either seek a review by the department of retirement systems to determine whether the employee has been misclassified, or may bring a civil action in a court of competent jurisdiction.  If a person seeks a review by the department of retirement systems, it may investigate and render a decision regarding whether the person has been misclassified in a manner that has had a negative impact on the employee's right to retirement benefits provided by statute, ordinance, or employer policy.  If the department determines that an employee has been misclassified, the public employer shall pay to the department of retirement systems an amount equal to the full cost of the investigation and review.


    NEW SECTION.  Sec. 3.  This act shall be construed liberally for the accomplishment of the purposes thereof.


    NEW SECTION.  Sec. 4.  If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.


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