Washington State House of Representatives Office of Program Research | BILL ANALYSIS |
Labor & Workplace Standards Committee |
ESB 6321
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: Addressing certain exclusions from the definition of worker under industrial insurance statutes.
Sponsors: Senators Baumgartner and Pedersen.
Brief Summary of Engrossed Bill |
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Hearing Date: 2/23/16
Staff: Joan Elgee (786-7106).
Background:
Under industrial insurance laws, workers are covered and premiums are owed unless an exception applies. In the construction industry, an individual performing services is not a covered worker if a seven-part test is met.
The seven-part test has the following elements, requiring that the individual:
Control or direction. Is free from control or direction;
Separate business. Performs a service:
that is outside the usual course of business for which the service is performed,
that is outside all of the places of business of the enterprise for which the service is performed, or
for which the individual is responsible for the costs of the principal place of business where the services are performed;
Established independent business. Has:
an independently established trade, occupation, profession, or business, or
a principal place of business that qualifies for an Internal Revenue Service (IRS)
deduction;
IRS schedule of expenses. Is responsible for filing a schedule of expenses with the IRS;
Books and records. Has a separate set of books and records that reflect all items of income and expenses;
State tax accounts. Has an active and valid account with the Department of Revenue, and any other required state agencies for the payment of taxes, on the contract date or within a reasonable period after the contract date; and
Contractor registration/electrical licensing. Is registered as a contractor or licensed as an electrical contractor on the contract date.
Each of the seven elements must be met.
Summary of Bill:
Elements of the seven-part independent contractor test are modified as follows:
Control or direction. The following do not constitute control or direction: Requirements regarding sequencing, deadlines, or date and time of entry to a worksite, reasonable expectations of professional dress, conduct, demeanor safety, or any other conditions specified in the agreement with the property owner or higher tier contractor.
Established independent business. The trade, occupation, profession, or business does not need to be independently established. The alternative for meeting the test, a principal place of business eligible for an IRS business deduction, is eliminated.
IRS schedule of expenses. The requirement that the individual be responsible for filing a schedule of expenses with the IRS is eliminated.
State tax accounts. The requirement to have active and valid accounts with any required state agencies is limited to the Departments of Revenue and Labor and Industries. If checked quarterly or within a reasonable period before, during, and/or after the agreement, reliance on information published by the Departments of Revenue and Labor and Industries constitutes compliance.
Books and records. The requirement that the individual has a separate set of books and records is eliminated.
Contractor registration/electrical license. If checked quarterly or within a reasonable period before, during, and/or after the agreements, reliance on information published by the Department of Labor and Industries constitutes compliance.
Appropriation: None.
Fiscal Note: Available.
Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.