Washington State House of Representatives Office of Program Research | BILL ANALYSIS |
Commerce & Labor Committee |
HB 1786
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent. |
Brief Description: Defining independent contractor for purposes of prevailing wage.
Sponsors: Representatives Ormsby, Campbell, Hunt, Hasegawa, Dunshee, Conway, Sullivan, Van De Wege, Chase and Wood.
Brief Summary of Bill |
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Hearing Date: 2/4/09
Staff: Joan Elgee (786-7106)
Background:
Under Washington's prevailing wage law, the prevailing wage must be paid to laborers, workers, and mechanics on public works and under public building service maintenance contracts. The law does not define who is a laborer, worker, or mechanic (or who is an independent contractor not required to be paid the prevailing wage). In 2008 the Legislature established a seven-part test for determining when work is done by independent contract in the construction industry for purposes of unemployment insurance and industrial insurance.
Summary of Bill:
A test for independent contractor is added to prevailing wage provisions. A person is not considered a laborer, worker, or mechanic (and therefore is an independent contractor not required to be paid the prevailing wage) if the independent contractor test used for purposes of industrial insurance and unemployment insurance in the construction industry is met. All parts of the following test must be met:
The individual has been and will continue to be free from control or direction over the performance of the service, both under contract and in fact.
The service is either outside the usual course of business for which the service is performed, or outside of all the places of the enterprise for which the service is performed, or the individual is responsible, both under the contract and in fact, for the costs of the place of business.
The individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature, or the individual has a principal place of business that is eligible for a business deduction for federal income tax purposes, other than that furnished by the employer.
On the effective date of the contract, the individual is responsible for filing, under the contract and in fact, a schedule of expenses with the Internal Revenue Service.
On the effective date of the contract or within a reasonable period after the effective date, the individual has an active and valid certificate of registration with the Department of Revenue and an active and valid account with any other state agencies, and has a Unified Business Identifier number.
On the effective date of the contract, the individual is maintaining a separate set of books or records.
On the effective date of the contract, the individual has a valid contractor registration or electrical contractor license if the work requires the registration or license.
Rules Authority: The bill does not address the rule-making powers of an agency.
Appropriation: None.
Fiscal Note: Requested on 2/1/09.
Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.