H-0368.1

HOUSE BILL 1181

ByRepresentatives Mena, Berry, Reed, Macri, Obras, Farivar, Fosse, Simmons, Pollet, Ormsby, and Hill

AN ACT Relating to strengthening Washington's labor standards and minimum wage act; amending RCW 49.46.010, 49.46.020, 49.46.180, 49.46.200, and 49.46.300; reenacting and amending RCW 49.46.210; adding new sections to chapter 49.46 RCW; prescribing penalties; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. RCW 49.46.010 and 2024 c 132 s 1 are each amended to read as follows:

As used in this chapter:

(1) "Department" means the department of labor and industries;

(2) "Director" means the director of labor and industries or the director's authorized representative;

(((2)))(3) "Employ" includes to permit to work;

(((3)))(4) "Employee" includes any individual employed by an employer but shall not include:

(a) Any individual (i) employed as a hand harvest laborer and paid on a piece rate basis in an operation which has been, and is generally and customarily recognized as having been, paid on a piece rate basis in the region of employment; (ii) who commutes daily from ((his or her))the individual's permanent residence to the farm on which ((he or she))the individual is employed; and (iii) who has been employed in agriculture less than ((thirteen))13 weeks during the preceding calendar year;

(b) Any individual employed in casual labor in or about a private home, unless performed in the course of the employer's trade, business, or profession;

(c) Any individual employed in a bona fide executive, administrative, or professional capacity or in the capacity of outside salesperson as those terms are defined and delimited by rules of the director. However, those terms shall be defined and delimited by the human resources director pursuant to chapter 41.06 RCW for employees employed under the director of personnel's jurisdiction;

(d) Any individual engaged in the activities of an educational, charitable, religious, state or local governmental body or agency, or nonprofit organization where the employer-employee relationship does not in fact exist or where the services are rendered to such organizations gratuitously. If the individual receives reimbursement in lieu of compensation for normally incurred out-of-pocket expenses or receives a nominal amount of compensation per unit of voluntary service rendered, an employer-employee relationship is deemed not to exist for the purpose of this section or for purposes of membership or qualification in any state, local government, or publicly supported retirement system other than that provided under chapter 41.24 RCW;

(e) Any individual employed full time by any state or local governmental body or agency who provides voluntary services but only with regard to the provision of the voluntary services. The voluntary services and any compensation therefor shall not affect or add to qualification, entitlement, or benefit rights under any state, local government, or publicly supported retirement system other than that provided under chapter 41.24 RCW;

(f) Any newspaper vendor, carrier, or delivery person selling or distributing newspapers on the street, to offices, to businesses, or from house to house and any freelance news correspondent or "stringer" who, using his or her own equipment, chooses to submit material for publication for free or a fee when such material is published;

(g) Any carrier subject to regulation by Part 1 of the Interstate Commerce Act;

(h) Any individual engaged in forest protection and fire prevention activities;

(i) Any individual employed by any charitable institution charged with child care responsibilities engaged primarily in the development of character or citizenship or promoting health or physical fitness or providing or sponsoring recreational opportunities or facilities for young people or members of the armed forces of the United States;

(j) Any individual whose duties require that ((he or she))the individual reside or sleep at the place of ((his or her))the individual's employment or who otherwise spends a substantial portion of ((his or her))the individual's work time subject to call, and not engaged in the performance of active duties;

(k) Any resident, inmate, or patient of a state, county, or municipal correctional, detention, treatment or rehabilitative institution;

(l) Any individual who holds a public elective or appointive office of the state, any county, city, town, municipal corporation or quasi municipal corporation, political subdivision, or any instrumentality thereof, or any employee of the state legislature;

(m) All vessel operating crews of the Washington state ferries operated by the department of transportation;

(n) Any individual employed as a seaman on a vessel other than an American vessel;

(o) Any farm intern providing ((his or her))the farm intern's services to a small farm which has a special certificate issued under RCW 49.12.471;

(p) An individual who is at least 16 years old but under ((twenty-one))21 years old, in ((his or her))the individual's capacity as a player for a junior ice hockey team that is a member of a regional, national, or international league and that contracts with an arena owned, operated, or managed by a public facilities district created under chapter 36.100 RCW; or

(q) Any individual who has entered into a contract to play baseball at the minor league level and who is compensated pursuant to the terms of a collective bargaining agreement that expressly provides for wages and working conditions;

(((4)))(5) "Employer" includes any individual, partnership, association, corporation, business trust, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee;

(((5)))(6)(a) "Family member" means a child, grandchild, grandparent, parent, sibling, or spouse of an employee or driver, and also includes any individual who regularly resides in the employee or driver's home or where the relationship creates an expectation that the employee or driver care for the person, and that individual depends on the employee or driver for care. "Family member" includes any individual who regularly resides in the employee or driver's home, except that it does not include an individual who simply resides in the same home with no expectation that the employee or driver care for the individual.

(7) "Occupation" means any occupation, service, trade, business, industry, or branch or group of industries or employment or class of employment in which employees are gainfully employed;

(((6)))(8) "Retail or service establishment" means an establishment ((seventy-five))75 percent of whose annual dollar volume of sales of goods or services, or both, is not for resale and is recognized as retail sales or services in the particular industry;

(((7)))(9) "Wage" means compensation due to an employee by reason of employment, payable in legal tender of the United States or checks on banks convertible into cash on demand at full face value, subject to such deductions, charges, or allowances as may be permitted by rules of the director.

Sec. 2. RCW 49.46.020 and 2019 c 236 s 2 are each amended to read as follows:

(1)(((a) Beginning January 1, 2017, and until January 1, 2018, every employer shall pay to each of his or her employees who has reached the age of eighteen years wages at a rate of not less than eleven dollars per hour.

(d) Beginning January 1, 2020, and until January 1, 2021, every employer shall pay to each of his or her employees who has reached the age of eighteen years wages at a rate of not less than thirteen dollars and fifty cents per hour.))Every employer shall pay to each of the employer's employees who has reached the age of 18 years wages at a rate of not less than the following during the following dates:

(2)(a) Beginning on January 1, ((2021))2032, and each following January 1st as set forth under (b) of this subsection, every employer shall pay to each of ((his or her))the employer's employees who has reached the age of ((eighteen))18 years wages at a rate of not less than the amount established under (b) of this subsection.

(b) On September 30, ((2020))2031, and on each following September 30th, the department ((of labor and industries)) shall calculate an adjusted minimum wage rate to maintain employee purchasing power by increasing the current year's minimum wage rate by the rate of inflation. The adjusted minimum wage rate shall be calculated to the nearest cent using the consumer price index for urban wage earners and clerical workers, CPI-W, or a successor index, for the ((twelve))12 months prior to each September 1st as calculated by the United States department of labor. Each adjusted minimum wage rate calculated under this subsection (2)(b) takes effect on the following January 1st.

(3) ((An))Regardless of whether a local government establishes a minimum wage rate that is higher than required under this chapter, an employer must pay to its employees: (a) All tips and gratuities; and (b) all service charges as defined under RCW 49.46.160 except those that, pursuant to RCW 49.46.160, are itemized as not being payable to the employee or employees servicing the customer. Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage required by this section or a local government.

(4) Beginning January 1, 2018, except as provided in RCW 49.46.180, every employer must provide to each of its employees paid sick leave as provided in RCW 49.46.200 and 49.46.210.

(5) Beginning January 1, 2027, except as provided in RCW 49.46.180 as amended by chapter . . ., Laws of 2025 (this act), every employer must provide to each of its employees paid vacation leave as provided in section 7 of this act.

(7) The director shall by regulation establish the minimum wage for employees under the age of ((eighteen))18 years.

NEW SECTION.  Sec. 3. A new section is added to chapter 49.46 RCW to read as follows:

(1) If the director determines that an employer has violated this act, the department may issue a stop-work order to cease all business operations at every site where the violation has occurred.

(2) Employers must pay employees normal hourly compensation for all hours they would have been regularly scheduled to work during the stop-work period. This requirement is a wage payment requirement under RCW 49.48.082.

(3) A stop-work order issued under this section remains in effect until the director issues an order releasing the stop-work order upon finding that the employer has paid any amounts owed to the employees, including interest, and any penalties due.

(4) As a condition for release from a stop-work order, the director may require the employer to file with the department periodic reports for a probationary period that demonstrate the employer's continued compliance with the provisions of this act. Any probationary period may not exceed two years.

(5)(a) The director may assess a civil penalty of not more than $5,000 per day against an employer for each day that the employer conducts business operations that violate the stop-work order.

(b) The department may adopt by rule penalty amounts under this subsection that vary by the size of the employer.

(c) On September 30, 2028, and on each following September 30th, the department of labor and industries shall calculate adjusted penalties payable pursuant to this section by increasing the current year's penalties by the rate of inflation. The penalties must be calculated to the nearest cent using the consumer price index for urban wage earners and clerical workers, CPI-W, or a successor index, for the 12 months prior to each September 1st as calculated by the United States department of labor. The adjusted penalties calculated under this subsection (5)(c) take effect on the following January 1st.

(6) An employer may contest a stop-work order within 72 hours of the issuance of the stop-work order by filing a petition for judicial review to superior court. Upon the filing of any such petition, the superior courts of the state of Washington have jurisdiction to issue a temporary stay of the stop-work order pending further agency action. The court may not grant a temporary stay unless the employer meets its burden to show such a stay is appropriate under RCW 34.05.550.

Sec. 4. RCW 49.46.180 and 2023 c 267 s 2 are each amended to read as follows:

(1) The ((sick leave provisions of RCW 49.46.200 through 49.46.830))sick, vacation, and bereavement leave provisions of this chapter shall not apply to construction workers covered by a collective bargaining agreement, provided:

(a) The union signatory to the collective bargaining agreement is an approved referral union program authorized under RCW 50.20.010 and in compliance with WAC 192-210-110; and

(b) The collective bargaining agreement establishes equivalent ((sick))or better sick, vacation, and bereavement leave provisions, as provided in subsection (2) of this section; and

(c) The requirements of ((RCW 49.46.200 through 49.46.830))the sick, vacation, and bereavement leave provisions of this chapter are expressly waived in the collective bargaining agreement in clear and unambiguous terms or in an addendum to an existing agreement including an agreement that is open for negotiation provided the sick leave portions were previously ratified by the membership.

(2) Equivalent ((sick)) leave provisions provided by a collective bargaining agreement must meet the requirements of ((RCW 49.46.200 through 49.46.830))the sick, vacation, and bereavement leave provisions of this chapter and the rules adopted by the department ((of labor and industries)), except the payment of leave at the normal hourly compensation may occur before usage and the payment of accrued and unused ((sick)) leave may be made in accordance with RCW 49.46.210.

Sec. 5. RCW 49.46.200 and 2017 c 2 s 4 are each amended to read as follows:

The demands of the workplace and of families need to be balanced to promote public health, individual health, family stability, sustainable working habits, and economic security. It is in the public interest to provide reasonable paid ((sick)) leave for employees to care for the health of themselves and their families. Such paid ((sick)) leave shall be provided at the greater of the newly increased minimum wage or the employee's regular and normal wage.

Sec. 6. RCW 49.46.210 and 2024 c 356 s 1 and 2024 c 39 s 1 are each reenacted and amended to read as follows:

(((1))) Beginning January 1, 2018, except as provided in RCW 49.46.180, every employer shall provide each of its employees paid sick leave as follows:

(((a)))(1) An employee shall accrue at least one hour of paid sick leave for every ((forty))40 hours worked as an employee. An employer may provide paid sick leave in advance of accrual provided that such front-loading meets or exceeds the requirements of this section for accrual, use, and carryover of paid sick leave.

(((b)))(2) An employee is authorized to use paid sick leave for the following reasons:

(((i)))(a) An absence resulting from an employee's mental or physical illness, injury, or health condition; to accommodate the employee's need for medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition; or an employee's need for preventive medical care;

(((ii)))(b) To allow the employee to provide care for a family member with a mental or physical illness, injury, or health condition; care of a family member who needs medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition; or care for a family member who needs preventive medical care; and

(((iii)))(c) When the employee's place of business has been closed by order of a public official for any health-related reason, or when an employee's child's school or place of care has been closed for such a health-related reason or after the declaration of an emergency by a local or state government or agency, or by the federal government.

(((c)))(3) An employee is authorized to use paid sick leave for absences that qualify for leave under the domestic violence leave act, chapter 49.76 RCW.

(((d)))(4) An employee is entitled to use accrued paid sick leave beginning on the ninetieth calendar day after the commencement of ((his or her))the employee's employment.

(((e)))(5) Employers are not prevented from providing more generous paid sick leave policies or permitting use of paid sick leave for additional purposes.

(((f)))(6) An employer may require employees to give reasonable notice of an absence from work, so long as such notice does not interfere with an employee's lawful use of paid sick leave.

(((g)))(7) For absences exceeding three days, an employer may require verification that an employee's use of paid sick leave is for an authorized purpose. If an employer requires verification, verification must be provided to the employer within a reasonable time period during or after the leave. An employer's requirements for verification may not result in an unreasonable burden or expense on the employee and may not exceed privacy or verification requirements otherwise established by law.

(((h)))(8) An employer may not require, as a condition of an employee taking paid sick leave, that the employee search for or find a replacement worker to cover the hours during which the employee is on paid sick leave.

(((i)))(9) For each hour of paid sick leave used, an employee shall be paid the greater of the minimum hourly wage rate established in this chapter or ((his or her))the employee's normal hourly compensation. The employer is responsible for providing regular notification to employees about the amount of paid sick leave available to the employee.

(((j)))(10) Except as provided in (((l) of this)) subsection (12) of this section, accrued and unused paid sick leave carries over to the following year, but an employer is not required to allow an employee to carry over paid sick leave in excess of 40 hours.

(((k)))(11) Except as provided in (((l) of this)) subsection (12) of this section, an employer is not required to provide financial or other reimbursement for accrued and unused paid sick leave to any employee upon the employee's termination, resignation, retirement, or other separation from employment. When there is a separation from employment and the employee is rehired within 12 months of separation by the same employer, whether at the same or a different business location of the employer, previously accrued unused paid sick leave shall be reinstated and the previous period of employment shall be counted for purposes of determining the employee's eligibility to use paid sick leave under (((d) of this)) subsection (4) of this section. For purposes of this subsection (((1)(k))), "previously accrued and unused paid sick leave" does not include sick leave paid out to a construction worker under (((l) of this)) subsection (12) of this section.

(((l)(i)))(12)(a) A construction industry employer must pay a construction worker, who has not met the 90th day eligibility under (((d) of this)) subsection (4) of this section at the time of separation, the balance of the worker's accrued and unused paid sick leave at the end of the established pay period following the worker's separation pursuant to RCW 49.48.010(2).

(((ii)))(b) The definitions in this subsection (((1)(l)(ii)))(12)(b) apply throughout this subsection (((1)(l))) unless the context clearly requires otherwise.

(((A)))(i) "Construction worker" means a worker who performed service, maintenance, or construction work on a jobsite, in the field or in a fabrication shop using the tools of the worker's trade or craft.

(((B)))(ii) "Construction industry employer" means an employer in the industry described in North American industry classification system industry code 23, except for residential building construction code 2361.

(((2) The definitions in this subsection apply throughout this section, except for subsection (5) of this section:

(q) The department may adopt rules to implement this subsection.))

NEW SECTION.  Sec. 7. A new section is added to chapter 49.46 RCW to read as follows:

Except as provided in RCW 49.46.180, every employer shall provide each of its employees paid vacation leave as follows:

(1) An employee shall accrue at least 2.3 hours of paid vacation leave for every 40 hours worked as an employee. An employer may provide paid vacation leave in advance of accrual provided that such front-loading meets or exceeds the requirements of this section for accrual, use, and carryover of paid vacation leave.

(2) An employee is entitled to use accrued paid vacation leave for any purpose beginning on the 90th calendar day after the commencement of their employment.

(3) Employers are not prevented from providing more generous paid vacation leave policies.

(4) An employer may require employees to give reasonable notice of an absence from work, so long as such notice does not interfere with an employee's lawful use of paid vacation leave.

(5) An employer may not require, as a condition of an employee taking paid vacation leave, that the employee search for or find a replacement worker to cover the hours during which the employee is on paid vacation leave.

(6) For each hour of paid vacation leave used, an employee shall be paid the greater of the minimum hourly wage rate established in this chapter or the employee's normal hourly compensation. The employer is responsible for providing regular notification to employees about the amount of paid vacation leave available to the employee.

(7) Except as provided in subsection (9) of this section, accrued and unused paid vacation leave carries over to the following year, but an employer is not required to allow an employee to carry over paid vacation leave in excess of 40 hours.

(8) Except as provided in subsection (9) of this section, an employer is not required to provide financial or other reimbursement for accrued and unused paid vacation leave to any employee upon the employee's termination, resignation, retirement, or other separation from employment. When there is a separation from employment and the employee is rehired within 12 months of separation by the same employer, whether at the same or a different business location of the employer, previously accrued unused paid vacation leave shall be reinstated and the previous period of employment shall be counted for purposes of determining the employee's eligibility to use paid vacation leave under subsection (2) of this section. For purposes of this subsection (8), "previously accrued and unused paid vacation leave" does not include vacation leave paid out to a construction worker under subsection (9) of this subsection.

(9)(a) A construction industry employer must pay a construction worker, who has not met the 90th day eligibility under subsection (2) of this section at the time of separation, the balance of the worker's accrued and unused paid vacation leave at the end of the established pay period following the worker's separation pursuant to RCW 49.48.010(2).

(b) For the purposes of this section, "construction worker" and "construction industry employer" have the same meanings as provided in RCW 49.46.210.

NEW SECTION.  Sec. 8. A new section is added to chapter 49.46 RCW to read as follows:

(1) Beginning on the 90th calendar day after the commencement of an employee's employment, the employee is entitled to at least five days of paid bereavement leave per calendar year if an employee's family member dies.

(2) Employers are not prevented from providing more generous bereavement leave policies or to allow employees to take additional leave without pay for purposes of bereavement.

(3) An employer may not require an employee to take paid bereavement leave on consecutive days.

(4) For each day of paid bereavement leave used, an employee shall be paid the greater of the minimum hourly wage rate established in this chapter or the employee's normal hourly compensation.

(5)(a) An employer may require verification of the family member's death.

(b) Employer-required verification may not result in an unreasonable burden or expense on the employee.

(c) If an employer requires verification for the use of bereavement leave, the employer must have a written policy or a collective bargaining agreement outlining any such requirements. The employer must notify the employee of such policy or agreement, including the employee's right to assert that the verification requirement results in an unreasonable burden or expense on the employee, prior to requiring the employee to provide verification. An employer must make this information readily available to all employees.

NEW SECTION.  Sec. 9. A new section is added to chapter 49.46 RCW to read as follows:

(1) An employer may not adopt or enforce any policy that counts the use of paid leave required under this chapter as an absence that may lead to or result in discipline against the employee.

(2) An employer may not discriminate or retaliate against an employee for the employee's exercise of any rights under this chapter including the use of paid leave required under RCW 49.46.210 or section 7 or 8 of this act.

Sec. 10. RCW 49.46.300 and 2022 c 281 s 1 are each amended to read as follows:

(((1))) The definitions in this ((subsection))section apply throughout this section and RCW 49.46.310 through 49.46.350 and sections 11 through 15 of this act unless the context clearly requires otherwise.

(((a)))(1) "Account deactivation" means one or more of the following actions with respect to an individual driver or group of drivers that is implemented by a transportation network company and lasts for more than three consecutive days:

(((i)))(a) Blocking access to the transportation network company driver platform;

(((ii)))(b) Changing a driver's status from eligible to provide transportation network company services to ineligible; or

(((iii)))(c) Any other material restriction in access to the transportation network company's driver platform.

(((b)))(2) "Compensation" means payment owed to a driver by reason of providing network services including, but not limited to, the minimum payment for passenger platform time and mileage, incentives, and tips.

(((c) "Department" means the department of labor and industries.

(d)))(3) "Digital network" means any online-enabled application, website, or system offered or used by a transportation network company that enables the prearrangement of rides between drivers and passengers.

(((e) "Director" means the director of the department of labor and industries.

(f)))(4) "Dispatch location" means the location of the driver at the time the driver accepts a trip request through the driver platform.

(((g)))(5) "Dispatch platform time" means the time a driver spends traveling from a dispatch location to a passenger pick-up location. Dispatch platform time ends when a passenger cancels a trip or the driver begins the trip through the driver platform. A driver cannot simultaneously be engaged in dispatch platform time and passenger platform time for the same transportation network company. For shared rides, dispatch platform time means the time a driver spends traveling from the first dispatch location to the first passenger pick-up location.

(((h)))(6) "Dispatched trip" means the provision of transportation by a driver for a passenger through the use of a transportation network company's application dispatch system.

(((i)))(7) "Driver" has the same meaning as "commercial transportation services provider driver" in RCW 48.177.005. Except as otherwise specified in chapter 281, Laws of 2022, for purposes of this title and Titles 48, 50A, 50B, and 51 RCW, and any orders, regulations, administrative policies, or opinions of any state or local agency, board, division, or commission, pursuant to those titles, a driver is not an employee or agent of a transportation network company if the following factors are met:

(((i)))(a) The transportation network company does not unilaterally prescribe specific dates, times of day, or a minimum number of hours during which the driver must be logged into the transportation network company's online-enabled application or platform;

(((ii)))(b) The transportation network company may not terminate the contract of the driver for not accepting a specific transportation service request;

(((iii)))(c) The transportation network company does not contractually prohibit the driver from performing services through other transportation network companies except while performing services through the transportation network company's online-enabled application or platform during dispatch platform time and passenger platform time; ((and

(iv)))(d) The transportation network company does not contractually prohibit the driver from working in any other lawful occupation or business((.));

(e) Notwithstanding any state or local law to the contrary, any party seeking to establish that the factors in this subsection (((1)(i)))(7) are not met bears the burden of proof((.)); and

(f) A driver for purposes of this section shall not include any person ultimately and finally determined to be an "employee" within the meaning of section 2(3) of the national labor relations act, 29 U.S.C. Sec. 152(3).

(((j)))(8) "Driver platform" means the driver-facing application dispatch system software or any online-enabled application service, website, or system, used by a driver, or which enables services to be delivered to a driver that enables the prearrangement of passenger trips for compensation.

(((k)))(9) "Driver resource center" or "center" means a nonprofit organization that provides services to drivers. The nonprofit organization must be registered with the Washington secretary of state, have organizational bylaws giving drivers right to membership in the organization, and have demonstrated experience: (i) Providing services to gig economy drivers in Washington state, including representing drivers in deactivation appeals proceedings; and (ii) providing culturally competent driver representation services, outreach, and education. The administration and formation of the driver resource center may not be funded, excessively influenced, or controlled by a transportation network company.

(((l)))(10) "Driver resource center fund" or "fund" means the dedicated fund created in RCW 49.46.310, the sole purpose of which is to administer funds collected from transportation network companies to provide services, support, and benefits to drivers.

(((m)))(11) "Network services" means services related to the transportation of passengers through the driver platform that are provided by a driver while logged in to the driver platform, including services provided during available platform time, dispatch platform time, and passenger platform time.

(((n)))(12) "Passenger" has the same meaning as "commercial transportation services provider passenger" in RCW 48.177.005.

(((o)))(13) "Passenger drop-off location" means the location of a driver's vehicle when the passenger leaves the vehicle.

(((p)))(14) "Passenger pick-up location" means the location of the driver's vehicle at the time the driver starts the trip in the driver platform.

(((q)))(15) "Passenger platform miles" means all miles driven during passenger platform time as recorded in a transportation network company's driver platform.

(((r)))(16) "Passenger platform time" means the period of time when the driver is transporting one or more passengers on a trip. For shared rides, passenger platform time means the period of time commencing when the first passenger enters the driver's vehicle until the time when the last passenger exits the driver's vehicle.

(((s)))(17) "Personal vehicle" has the same meaning as "personal vehicle" in RCW 48.177.005.

(((t)))(18) "Shared ride" means a dispatched trip which, prior to its commencement, a passenger requests through the transportation network company's digital network to share the dispatched trip with one or more passengers and each passenger is charged a fare that is calculated, in whole or in part, based on the passenger's request to share all or a part of the dispatched trip with one or more passengers, regardless of whether the passenger actually shares all or a part of the dispatched trip.

(((u)))(19) "Tips" means a verifiable sum to be presented by a passenger as a gift or gratuity in recognition of service performed for the passenger by the driver receiving the tip.

(((v)))(20) "Transportation network company" has the same meaning as defined in RCW 46.04.652. A transportation network company does not provide for hire transportation service.

(((2) A driver is only covered by this section to the extent that the driver provides network services within the state of Washington.

(16) The department may adopt rules to implement this section.))

NEW SECTION.  Sec. 11. A new section is added to chapter 49.46 RCW to read as follows:

(1) A driver is only covered by this section to the extent that the driver provides network services within the state of Washington.

(2)(a) A transportation network company is covered by this section if it provides a driver platform within the state of Washington.

(b) Separate entities that form an integrated enterprise are considered a single transportation network company under this section. Separate entities will be considered an integrated enterprise and a single transportation network company where a separate entity controls the operation of another entity. Factors to consider include, but are not limited to: The degree of interrelation between the operations of multiple entities; the degree to which the entities share common management; the centralized control of labor relations; the degree of common ownership or financial control over the entities; and the use of a common brand, trade, business, or operating name.

(3)(a) Beginning December 31, 2022, a transportation network company shall ensure that a driver's total compensation is not less than the standard set forth in this subsection (3)(a).

(i) For all dispatched trips originating in cities with a population of more than 600,000, on a per trip basis the greater of:

(A) $0.59 per passenger platform minute for all passenger platform time for that trip, and $1.38 per passenger platform mile for all passenger platform miles driven on that trip; or

(B) A minimum of $5.17 per dispatched trip.

(ii) For all other dispatched trips, the greater of:

(A) $0.34 per passenger platform minute and $1.17 per passenger platform mile; or

(B) A minimum of $3.00 per dispatched trip.

(iii) For all trips originating elsewhere and terminating in cities with a population of more than 600,000:

(A) For all passenger platform time spent within the city on that trip and for all passenger platform miles driven in the city on that trip the compensation standard under (a)(i) of this subsection applies;

(B) For all passenger platform time spent outside the city on that trip and for all passenger platform miles driven outside the city on that trip the compensation standard under (a)(ii) of this subsection applies.

(b) Beginning September 30, 2022, and on each following September 30th, the department shall calculate adjusted per mile and per minute amounts and per trip minimums by increasing the current year's per mile and per minute amounts and per trip minimums by the rate of increase of the state minimum wage, calculated to the nearest cent. The adjusted amount calculated under this section takes effect on the following January 1st.

(c) For shared rides, the per trip minimums in (a)(i) and (ii) of this subsection shall apply only to the entirety of the shared ride, and not on the basis of the individual passenger's trip within the shared ride.

(4)(a) For the purposes of this section, a dispatched trip includes:

(i) A dispatched trip in which the driver transports the passenger to the passenger drop-off location;

(ii) A dispatched trip canceled after two minutes by a passenger or the transportation network company unless cancellation is due to driver conduct, or no cancellation fee is charged to the passenger;

(iii) A dispatched trip that is canceled by the driver for good cause consistent with company policy; and

(iv) A dispatched trip where the passenger does not appear at the passenger pick-up location within five minutes.

(b) A transportation network company may exclude time and miles if doing so is reasonably necessary to remedy or prevent fraudulent use of the transportation network company's online-enabled application or platform.

(5)(a) A transportation network company shall remit to drivers all tips. Tips paid to a driver are in addition to, and may not count towards, the driver's minimum compensation under this section.

(b) Amounts charged to a passenger and remitted to the driver for tolls, fees, or surcharges incurred by a driver during a trip must not be included in calculating compensation for purposes of subsection (3) of this section.

(c)(i) Beginning January 1, 2023, except as required by law, a transportation network company may only deduct compensation when the driver expressly authorizes the deduction in writing and does so in advance for a lawful purpose. Any authorization by a driver must be voluntary and knowing.

(ii) Nothing in this section shall prohibit a transportation network company from deducting compensation as required by state or federal law or as directed by a court order.

(iii) Neither the transportation network company nor any person acting in the interest of the transportation network company may derive any financial profit or benefit from any of the deductions under this section. For the purposes of this section:

(A) Reasonable interest charged by the transportation network company or any person acting in the interest of a transportation network company, for a loan or credit extended to the driver, is not considered to be of financial benefit to the transportation network company or person acting in the interest of a transportation network company; and

(B) A deduction will be considered for financial profit or benefit only if it results in a gain over and above the fair market value of the goods or services for which the deduction was made.

(6)(a) Beginning January 1, 2023, a transportation network company shall provide each driver with a written notice of rights established by this section in a form and manner sufficient to inform drivers of their rights under this section. The notice of rights shall provide information on:

(i) The right to the applicable per minute rate and per mile rate or per trip rate guaranteed by this section;

(ii) The right to be protected from retaliation for exercising in good faith the rights protected by this section; and

(iii) The right to seek legal action or file a complaint with the department for violation of the requirements of this section, including a transportation network company's failure to pay the minimum per minute rate or per mile rate or per trip rate, or a transportation network company's retaliation against a driver or other person for engaging in an activity protected by this section.

(b) A transportation network company shall provide the notice of rights required by this section in an electronic format that is readily accessible to the driver. The notice of rights shall be made available to the driver via smartphone application or online web portal, in English, and the five most common foreign languages spoken in this state.

(7) Beginning December 31, 2022, within 24 hours of completion of each dispatched trip, a transportation network company must transmit an electronic receipt to the driver that contains the following information for each unique trip, or portion of a unique trip, covered by this section:

(a) The total amount of passenger platform time;

(b) The total mileage driven during passenger platform time;

(c) Rate or rates of pay including, but not limited to, the rate per minute, rate per mile, percentage of passenger fare, and any applicable price multiplier or variable pricing policy in effect for the trip;

(d) Tip compensation;

(e) Gross payment;

(f) Net payment after deductions, fees, tolls, surcharges, lease fees, or other charges; and

(g) Itemized deductions or fees, including any toll, surcharge, commission, lease fees, and other charges.

(8) Beginning January 1, 2023, a transportation network company shall make driver per trip receipts available in a downloadable format, such as a comma-separated values file or PDF file, via smartphone application or online web portal for a period of two years from the date the transportation network company provided the receipt to the driver.

(9) Beginning January 1, 2023, on a weekly basis, the transportation network company shall provide written notice to the driver that contains the following information for trips, or a portion of a trip, that is covered by this section and which occurred in the prior week:

(a) The driver's total passenger platform time;

(b) Total mileage driven by the driver during passenger platform time;

(c) The driver's total tip compensation;

(d) The driver's gross payment, itemized by: (i) Rate per minute; (ii) rate per mile; and (iii) any other method used to calculate pay including, but not limited to, base pay, percentage of passenger fare, or any applicable price multiplier or variable pricing policy in effect for the trip;

(e) The driver's net payment after deductions, fees, tolls, surcharges, lease fees, or other charges; and

(f) Itemized deductions or fees, including all tolls, surcharges, commissions, lease fees, and other charges, from the driver's payment.

(10) Beginning January 1, 2023, within 24 hours of a trip's completion, a transportation network company must transmit an electronic receipt to the passenger, for on trip time, on behalf of the driver that lists:

(a) The date and time of the trip;

(b) The passenger pick-up and passenger drop-off locations for the trip. In describing the passenger pick-up location and passenger drop-off location, the transportation network company shall describe the location by indicating the specific block (e.g. "the 300 block of Pine Street") in which the passenger pick-up and passenger drop-off occurred. A transportation network company is authorized to indicate the location with greater specificity, such as with a street address or intersection, at its discretion;

(c) The total duration and distance of the trip;

(d) The driver's first name;

(e) The total fare paid, itemizing all charges and fees; and

(f) The total passenger-paid tips.

NEW SECTION.  Sec. 12. A new section is added to chapter 49.46 RCW to read as follows:

(1)(a) Transportation network companies shall collect and remit a $0.15 per trip fee to the driver resource center fund, created in RCW 49.46.310, for the driver resource center to support the driver community. The remittance under this subsection is a pass-through of passenger fares and shall not be considered a transportation network company's funding of the driver resource center. Passenger fares paid include each individual trip portion on shared trips. The remittances to the fund must be made on a quarterly basis.

(b) Beginning September 30, 2024, and on each following September 30th, the department shall calculate an adjusted per trip fee by adjusting the current amount by the rate of inflation. The adjusted amounts must be calculated to the nearest cent using the consumer price index for urban wage earners and clerical workers, CPI-W, or a successor index, for the 12 months prior to each September 1st as calculated by the United States department of labor. Each adjusted amount calculated under this subsection takes effect on the following January 1st.

(2) Transportation network companies shall provide an opportunity for drivers to make voluntary per trip earnings deduction contributions to the driver resource center, provided that 100 or more drivers working for transportation network companies covered under this section have authorized such a deduction to the driver resource center, and subject to the following:

(a) A driver must expressly authorize the deduction in writing. Written authorization must include, at a minimum, sufficient information to identify the driver and the driver's desired per trip deduction amount. These deductions may reduce the driver's per trip earnings below the minimums set forth in this section.

(b) The transportation network company may require written authorization to be submitted in electronic format from the driver resource center.

(c) The transportation network company shall make the first deductions within 30 days of receiving a written authorization of the driver and shall remit deductions to the driver resource center each month, with remittance due not later than 28 days following the end of the month.

(d) A driver's authorization remains in effect until the driver resource center provides an express revocation to the transportation network company.

(e) A transportation network company shall rely on information provided by the driver resource center regarding the authorization and revocation of deductions.

(f) Upon request by a transportation network company, the driver resource center shall reimburse the transportation network company for the costs associated with deduction and remittance. The department shall adopt rules to calculate the reimbursable costs.

(3) Each transportation network company shall submit to the fund, with its remittance under subsection (1) of this section, a report detailing the number of trips in the previous quarter and the total amount of the surcharge charged to customers. The first payment and accounting is due on the 30th day of the quarter following the imposition of the surcharge. Failure to remit payments by the deadlines is deemed a delinquency and the transportation network company is subject to penalties and interest provided in RCW 49.46.330.

(4)(a) The state expressly intends to displace competition with regulation allowing a transportation network company, at its own volition, to enter into an agreement with the driver resource center regarding a driver account deactivation appeals process for eligible account deactivations. It is the policy of the state to promote a fair appeals process related to eligible account deactivations that supports the rights of drivers and transportation network companies and provides fair processes related to eligible account deactivations. The state intends that any agreement under this section is immune from all federal and state antitrust laws.

(i) "Eligible account deactivation" means one or more of the following actions with respect to an individual driver that is implemented by a transportation network company:

(A) Blocking or restricting access to the transportation network company driver platform for three or more consecutive days; or

(B) Changing a driver's account status from eligible to provide transportation network company services to ineligible for three or more consecutive days.

(ii) An eligible account deactivation does not include any change in a driver's access or account status that is:

(A) Related to an allegation of discrimination, harassment, including sexual harassment or harassment due to someone's membership in a protected class, or physical or sexual assault, or willful or knowing commitment of fraud;

(B) Related to an allegation that the driver was under the influence of drugs or alcohol while a related active investigation that takes no longer than 10 business days is underway; or

(C) Any other categories the transportation network company and the driver resource center may agree to as part of the agreement under this subsection.

(iii) A transportation network company shall enter into an agreement with the driver resource center regarding the driver account deactivation appeals process for eligible account deactivations. Any agreement must be approved by the department. The department may approve an agreement only if the agreement contains the provisions in (a)(iv) of this subsection.

(iv) The agreement must provide an appeals process for drivers whose account has been subject to an eligible account deactivation. The appeals process must include the following protections:

(A) Opportunity for a driver representative to support a driver, upon the driver's request, throughout the account deactivation appeals process for eligible account deactivations;

(B) Notification, as required by (d) of this subsection, to drivers of their right to representation by the driver resource center at the time of the eligible account deactivation;

(C) Within 30 calendar days of a request, furnishing to the driver resource center an explanation and information the transportation network company may have relied upon in making the deactivation decision, excluding confidential, proprietary, or otherwise privileged communications, provided that personal identifying information and confidential information is redacted to address reasonable privacy and confidentiality concerns;

(D) A good faith, informal resolution process that is committed to efficient resolution of conflicts regarding eligible account deactivations within 30 days of the transportation network company being notified that the driver contests the explanation offered by the company;

(E) A formal process that includes a just cause standard, with deadlines for adjudication of an appeal of an eligible account deactivation by a panel that includes a mutually agreed-upon neutral third party with experience in dispute resolution. The panel has the authority to make binding decisions within the confines of the law and make whole monetary awards, including back pay, based on an agreed-upon formula for cases not resolved during the informal process;

(F) Agreement by the transportation network company to use the process set forth in this subsection to resolve disputes over eligible account deactivation appeals as an alternative to private arbitration with regard to such a dispute, should the driver and transportation network company so choose; and

(G) Agreement by the transportation network company that, for eligible account deactivations in which the driver or transportation network company elect private arbitration in lieu of the formal process outlined in (a)(iv)(E) of this subsection (4), the transportation network company shall offer the driver the opportunity to have the eligible deactivation adjudicated under the just cause standard outlined in (a)(iv)(E) of this subsection.

(b) A transportation network company that enters into an agreement with the driver resource center shall reach agreement through the following steps:

(i)(A) For a transportation network company operating a digital network in the state of Washington as of June 9, 2022, the driver resource center and transportation network company must make good faith efforts to reach an agreement within 120 days of an organization being selected as the driver resource center under RCW 49.46.310.

(B) For a transportation network company who begins operating a digital network in the state of Washington after an organization has been selected as the driver resource center under RCW 49.46.310, the driver resource center and transportation network company must make good faith efforts to reach an agreement within 120 days of the transportation network company beginning operation of a digital network in the state of Washington.

(ii) If the driver resource center and transportation network company cannot reach an agreement, then they are required to submit issues of dispute before a jointly agreed-upon mediator.

(iii) After mediation lasting no more than two months has been exhausted and no resolution has been reached, then the parties will proceed to binding arbitration before a panel of arbitrators consisting of one arbitrator selected by the driver resource center, one arbitrator selected by the transportation network company, and a third arbitrator selected by the other two. If the two selected arbitrators cannot agree to the third arbitrator within 10 days, then the third arbitrator shall be determined from a list of seven arbitrators with experience in labor disputes or interest arbitration designated by the American arbitration association. A coin toss shall determine which side strikes the first name. Thereafter the other side shall strike a name. The process will continue until only one name remains, who shall be the third arbitrator. Alternatively, the driver resource center and the transportation network company may agree to a single arbitrator.

(iv) The arbitrators must submit their decision, based on majority rule, within 60 days of the panel or arbitrator being chosen.

(v) The decision of the majority of arbitrators is final and binding and will then be submitted to the director of the department for final approval.

(c) In reviewing any agreement between a transportation network company and the driver resource center, under (a) of this subsection, the department shall review the agreement to ensure that its content is consistent with this subsection and the public policy goals set forth in this subsection. The department shall consider in its review both qualitative and quantitative effects of the agreement and how the agreement comports with the state policies set forth in this section. In conducting a review, the record shall not be limited to the submissions of the parties nor to the terms of the proposed agreement and the department shall have the right to conduct public hearings and request additional information from the parties, provided that such information: (i) Is relevant for determining whether the agreement complies with this subsection; and (ii) does not contain either parties' confidential, proprietary, or privileged information, or any individual's personal identifying information from the parties. The department may approve or reject a proposed agreement, and may require the parties to submit a revised proposal on all or particular parts of the proposed agreement. If the department rejects an agreement, it shall set forth its reasoning in writing and shall suggest ways the parties may remedy the failures. Absent good cause, the department shall issue a written determination regarding its approval or rejection within 60 days of submission of the agreement.

(d)(i) For any account deactivation, the transportation network company shall provide notification to the driver, at the time of deactivation, that the driver may have the right to representation by the driver resource center to appeal the account deactivation.

(ii) A transportation network company must provide any driver whose account is subject to an account deactivation between June 9, 2022, and the effective date of the agreement the contact information of the driver resource center and notification that the driver may have the right to appeal the account deactivation with representation by the driver resource center.

NEW SECTION.  Sec. 13. A new section is added to chapter 49.46 RCW to read as follows:

(1) Beginning January 1, 2023, a transportation network company must provide to each driver operating on its driver platform compensation for earned paid sick time as required by this section and subject to the provisions of this section. A driver shall accrue one hour of earned paid sick time for every 40 hours of passenger platform time worked.

(2) A driver is entitled to use accrued earned paid sick time upon recording 90 hours of passenger platform time on the transportation network company's driver platform.

(3) For each hour of earned paid sick time used, a driver shall be paid the driver's average hourly compensation.

(4) A transportation network company shall establish an accessible system for drivers to request and use earned paid sick time. The system must be available to drivers via smartphone application and online web portal.

(5) A driver may carry over up to 40 hours of unused earned paid sick time to the next calendar year. If a driver carries over unused earned paid sick time to the following year, accrual of earned paid sick time in the subsequent year must be in addition to the hours accrued in the previous year and carried over.

(6) A driver is entitled to use accrued earned paid sick time if the driver has used the transportation network company's platform as a driver within 90 calendar days preceding the driver's request to use earned paid sick time.

(7) A driver is entitled to use earned paid sick time for the following reasons:

(a) An absence resulting from the driver's mental or physical illness, injury, or health condition; to accommodate the driver's need for medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition; or an employee's need for preventive medical care;

(b) To allow the driver to provide care for a family member with a mental or physical illness, injury, or health condition; care of a family member who needs medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition; or care for a family member who needs preventive medical care;

(c) When the driver's child's school or place of care has been closed by order of a public official for any health-related reason or has been closed after the declaration of an emergency by a local or state government or agency, or by the federal government;

(d) For absences for which an employee would be entitled for leave under RCW 49.76.030; and

(e) During a deactivation or other status that prevents the driver from performing network services on the transportation network company's platform, unless the deactivation or status is due to a verified allegation of sexual assault or physical assault perpetrated by the driver.

(8) If a driver does not record any passenger platform time in a transportation network company's driver platform for 365 or more consecutive days, any unused earned paid sick time accrued up to that point with that transportation network company is no longer valid or recognized.

(9) Drivers may use accrued days of earned paid sick time in increments of a minimum of one or more hours. Drivers are entitled to request one or more hours of earned paid sick time for immediate use, including consecutive days of use. Drivers are not entitled to use more than eight hours of earned paid sick time within a single calendar day.

(10) A transportation network company shall compensate a driver for requested hours or days of earned paid sick time no later than 14 calendar days or the next regularly scheduled date of compensation following the requested hours or days of earned paid sick time.

(11) A transportation network company shall not request or require reasonable verification of a driver's qualifying illness except as would be permitted to be requested of an employee under RCW 49.46.210(7). If a transportation network company requires verification pursuant to this subsection, the transportation network company must compensate the driver for the requested hours or days of earned paid sick time no later than the driver's next regularly scheduled date of compensation after satisfactory verification is provided.

(12) If a driver accepts an offer of prearranged services for compensation from a transportation network company during the one-hour period or periods for which the driver requested earned paid sick time, a transportation network company may determine that the driver did not use earned paid sick time for an authorized purpose.

(13) A transportation network company shall provide each driver with:

(a) Written notification of the current rate of average hourly compensation while a passenger is in the vehicle during the most recent calendar month for use of earned paid sick time;

(b) An updated amount of accrued earned paid sick time since the last notification;

(c) Reduced earned paid sick time since the last notification;

(d) Any unused earned paid sick time available for use; and

(e) Any amount that the transportation network company may subtract from the driver's compensation for earned paid sick time. The transportation network company shall provide this information to the driver no less than monthly. The transportation network company may choose a reasonable system for providing this notification including, but not limited to: A pay stub; a weekly summary of compensation information; or an online system where drivers can access their own earned paid sick time information. A transportation network company is not required to provide this information to a driver if the driver has not worked any days since the last notification.

(14) The definitions in this subsection apply throughout this section:

(a) "Average hourly compensation" means a driver's compensation during passenger platform time from, or facilitated by, the transportation network company, during the 365 days immediately prior to the day that paid sick time is used, divided by the total hours of passenger platform time worked by the driver on that transportation network company's driver platform during that period. "Average hourly compensation" does not include tips.

(b) "Earned paid sick time" is the time provided by a transportation network company to a driver as calculated under this subsection. For each hour of earned paid sick time used by a driver, the transportation network company shall compensate the driver at a rate equal to the driver's average hourly compensation.

NEW SECTION.  Sec. 14. A new section is added to chapter 49.46 RCW to read as follows:

(1) A transportation network company must provide to each driver operating on its driver platform compensation for earned vacation time as required by this section and subject to the provisions of this section. A driver shall accrue 2.3 hours of earned paid vacation time for every 40 hours of passenger platform time worked.

(2) A driver is entitled to use accrued earned paid vacation time upon recording 90 hours of passenger platform time on the transportation network company's driver platform.

(3) For each hour of earned paid vacation time used, a driver shall be paid the driver's average hourly compensation.

(4) A transportation network company shall establish an accessible system for drivers to request and use earned paid vacation time. The system must be available to drivers via smartphone application and online web portal.

(5) A driver may carry over up to 40 hours of unused earned paid vacation time to the next calendar year. If a driver carries over unused earned paid vacation time to the following year, accrual of earned paid vacation time in the subsequent year must be in addition to the hours accrued in the previous year and carried over.

(6) A driver is entitled to use accrued earned paid vacation time if the driver has used the transportation network company's platform as a driver within 90 calendar days preceding the driver's request to use earned paid vacation time.

(7) A driver is entitled to use earned paid vacation time during a deactivation or other status that prevents the driver from performing network services on the transportation network company's platform, unless the deactivation or status is due to a verified allegation of sexual assault or physical assault perpetrated by the driver.

(8) If a driver does not record any passenger platform time in a transportation network company's driver platform for 365 or more consecutive days, any unused earned paid vacation time accrued up to that point with that transportation network company is no longer valid or recognized.

(9) Drivers may use accrued days of earned paid vacation time in increments of a minimum of one or more hours. Drivers are entitled to request one or more hours of earned paid vacation time for immediate use, including consecutive days of use. Drivers are not entitled to use more than eight hours of earned paid vacation time within a single calendar day.

(10) A transportation network company shall compensate a driver for requested hours or days of earned paid vacation time no later than 14 calendar days or the next regularly scheduled date of compensation following the requested hours or days of earned paid vacation time.

(11) A transportation network company shall provide each driver with:

(a) Written notification of the current rate of average hourly compensation while a passenger is in the vehicle during the most recent calendar month for use of earned paid vacation time;

(b) An updated amount of accrued earned paid vacation time since the last notification;

(c) Reduced earned paid vacation time since the last notification;

(d) Any unused earned paid vacation time available for use; and

(e) Any amount that the transportation network company may subtract from the driver's compensation for earned paid vacation time. The transportation network company shall provide this information to the driver no less than monthly. The transportation network company may choose a reasonable system for providing this notification including, but not limited to: A pay stub; a weekly summary of compensation information; or an online system where drivers can access their own earned paid vacation time information. A transportation network company is not required to provide this information to a driver if the driver has not worked any days since the last notification.

(12) The definitions in this subsection apply throughout this section:

(a) "Average hourly compensation" means a driver's compensation during passenger platform time from, or facilitated by, the transportation network company, during the 365 days immediately prior to the day that paid vacation time is used, divided by the total hours of passenger platform time worked by the driver on that transportation network company's driver platform during that period. "Average hourly compensation" does not include tips.

(b) "Earned paid vacation time" is the time provided by a transportation network company to a driver as calculated under this subsection. For each hour of earned paid vacation time used by a driver, the transportation network company shall compensate the driver at a rate equal to the driver's average hourly compensation.

NEW SECTION.  Sec. 15. A new section is added to chapter 49.46 RCW to read as follows:

(1) A transportation network company may not adopt or enforce any policy that counts the use of earned paid sick time required under section 13 of this act or earned vacation leave under section 14 of this act as an absence that may lead to or result in any action that adversely affects the driver's use of the transportation network.

(2) A transportation network company may not take any action against a driver that adversely affects the driver's use of the transportation network due to the driver's exercise of any rights under this chapter including the use of earned paid sick time under section 13 of this act or earned vacation leave under section 14 of this act.

NEW SECTION.  Sec. 16. A new section is added to chapter 49.46 RCW to read as follows:

The department may adopt rules to implement this chapter.

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