Washington State

House of Representatives

Office of Program Research

BILL

ANALYSIS

Labor & Workforce Development Committee

HB 2258

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: Simplifying and providing clarity to independent contractor tests for the construction industry.

Sponsors: Representatives Buys, Manweller and Fagan.

Brief Summary of Bill

  • Modifies independent contractor test for the construction industry for purposes of industrial insurance, unemployment insurance, prevailing wage, the Minimum Wage Act, and the Washington Industrial Safety and Health Act.

  • Provides that an individual is an independent contractor if the individual has the required accounts for purposes of state taxes, and is registered as a contractor or licensed as an electrical contractor.

Hearing Date: 1/21/14

Staff: Joan Elgee (786-7106).

Background:

Employment standards and benefits generally apply only if an employer-employee relationship exists rather than an independent contractor relationship. Various multi-part tests are used to determine whether an individual is an independent contractor. For the construction industry, a seven-part statutory independent contractor test is applied for purposes of prevailing wage, industrial insurance, and unemployment insurance. For industrial insurance, a threshold question is whether a person under contract bring more than their personal labor to the job. The seven-part test requires that:

A common law test, known as the economic dependence test, applies to the Minimum Wage Act, which addresses minimum wage and overtime. The inquiry is whether the worker is economically dependent on the alleged employer or is instead in business for himself or herself. Other employment laws that do not have statutory tests include the Washington Industrial Safety and Health Act.

Summary of Bill:

The independent contractor test for construction for various laws is modified.

An individual is not covered if the individual:

The test applies to industrial insurance, unemployment insurance, prevailing wage, the Minimum Wage Act and the Washington Industrial Safety and Health Act. The other elements of the existing statutory independent contractor tests in construction in workers' compensation, unemployment insurance, and prevailing wage are eliminated.

Appropriation: None.

Fiscal Note: Requested on January 15, 2014.

Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.