CERTIFICATION OF ENROLLMENT

ENGROSSED SUBSTITUTE HOUSE BILL 2076

67TH LEGISLATURE

2022 REGULAR SESSION

ENGROSSED SUBSTITUTE HOUSE BILL 2076

AS AMENDED BY THE SENATE

ByHouse Labor & Workplace Standards (originally sponsored by Representatives Berry, Simmons, Kloba, Bergquist, Pollet, Kirby, Bronoske, Fitzgibbon, Ryu, and Macri)

AN ACT Relating to rights and obligations of transportation network company drivers and transportation network companies; amending RCW 49.46.210, 51.12.020, 51.08.070, 51.08.180, 51.16.060, and 48.177.010; adding new sections to chapter 49.46 RCW; adding a new section to chapter 51.16 RCW; adding a new section to chapter 51.04 RCW; adding a new chapter to Title 46 RCW; creating a new section; recodifying RCW 48.177.010; and providing effective dates.

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

NEW SECTION.  Sec. 1. A new section is added to chapter 49.46 RCW to read as follows:

(1) The definitions in this subsection apply throughout this section and sections 2 through 5 and 7 of this act unless the context clearly requires otherwise.

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

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

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

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

(g) "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) "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) "Driver" has the same meaning as "commercial transportation services provider driver" in RCW 48.177.005. Except as otherwise specified in this act, 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) 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) The transportation network company may not terminate the contract of the driver for not accepting a specific transportation service request;

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

Notwithstanding any state or local law to the contrary, any party seeking to establish that the factors in this subsection (1)(i) are not met bears the burden of proof. 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) "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) "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) "Driver resource center fund" or "fund" means the dedicated fund created in section 2 of this act, the sole purpose of which is to administer funds collected from transportation network companies to provide services, support, and benefits to drivers.

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

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

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

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

(t) "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) "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) "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.

(3)(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.

(4)(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 (a)(i), (ii), or (iii) of this subsection (4).

(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.

(5)(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.

(6)(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 (4) 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.

(7)(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.

(8) 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.

(9) 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.

(10) 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.

(11) 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.

(12)(a) Beginning July 1, 2024, transportation network companies shall collect and remit a $0.15 per trip fee to the driver resource center fund, created in section 2 of this act, 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.

(13) No later than one year after the effective date of this section, 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.

(14) Each transportation network company shall submit to the fund, with its remittance under subsection (12) 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 section 4 of this act.

(15)(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 under way; 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 (15), 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 the effective date of this section, 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 section 2 of this act.

(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 section 2 of this act, 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 the effective date of this section 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.

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

NEW SECTION.  Sec. 2. A new section is added to chapter 49.46 RCW to read as follows:

(1) The legislature recognizes that providing education and outreach to drivers regarding their rights and obligations furthers the state's interest in having a vibrant knowledgeable work force and safe and satisfied consumers. The legislature therefore intends to create a way of providing education, outreach, and support to workers who, because of the nature of their work, do not have access to such support through traditional avenues.

(2) The driver resource center fund is created in the custody of the state treasurer. All moneys received from the remittance in section 1(12) of this act must be deposited into the fund.

(3) Only the director of the department of labor and industries or the director's designee may authorize expenditures from the fund. The fund is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

(4) The department may make expenditures from the fund for the following purposes:

(a) Services provided by the driver resource center, as defined in section 1 of this act, to drivers and administrative costs of providing such support. The department must distribute funding received by the account, exclusive of the department's administrative costs deducted under (b) of this subsection, to the center on a quarterly basis; and

(b) The department's costs of administering the fund and its duties under section 1 of this act, not to exceed 10 percent of revenues to the fund.

(5) Within four months of the effective date of this section, the director of the department or the director's designee shall, through a competitive process, select and contract with a qualified nonprofit organization to be the driver resource center.

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

(1)(a) If a driver files a complaint with the department alleging that a transportation network company failed to provide any compensation amounts due to the driver under section 1 of this act, the department shall investigate the complaint under this section. Unless otherwise resolved, the department shall issue either a citation and notice of assessment or a determination of compliance no later than 60 days after the date on which the department received the compensation-related complaint. The department may extend the time period by providing advance written notice to the driver and the transportation network company setting forth good cause for an extension of the time period and specifying the duration of the extension.

(b) The department may not investigate any alleged compensation-related violation that occurred more than three years before the date that the driver filed the compensation-related complaint.

(c) The department shall send the citation and notice of assessment or the determination of compliance to both the transportation network company and the driver by service of process or using a method by which the mailing can be tracked or the delivery can be confirmed to their last known addresses. A transportation network company may designate a mailing address of record for service, and additionally may provide an email address to which the department shall direct electronic courtesy copies of mailed correspondence, if such email address is provided.

(2) If the department determines that a transportation network company has violated a compensation requirement in section 1 of this act and issues to the transportation network company a citation and notice of assessment, the department may order the transportation network company to pay drivers all compensation owed, including interest of one percent per month on all compensation owed, to the driver. The compensation and interest owed must be calculated from the first date compensation was owed to the driver, except that the department may not order the transportation network company to pay any compensation and interest that were owed more than three years before the date the complaint was filed with the department.

(3) If the department determines that the compensation-related violation was a willful violation, and the transportation network company fails to take corrective action, the department also may order the transportation network company to pay the department a civil penalty as specified in (a) of this subsection.

(a) A civil penalty for a willful violation shall be not less than $1,000 or an amount equal to 10 percent of the total amount of unpaid compensation per claimant, whichever is greater. The maximum civil penalty for a willful violation of requirements in section 1 of this act shall be $20,000 per claimant.

(b) The department may not assess a civil penalty if the transportation network company reasonably relied on: (i) A rule related to any requirements in this section; (ii) a written order, ruling, approval, opinion, advice, determination, or interpretation of the director; or (iii) an interpretive or administrative policy issued by the department and filed with the office of the code reviser. In accordance with the department's retention schedule obligations under chapter 40.14 RCW, the department shall maintain a complete and accurate record of all written orders, rulings, approvals, opinions, advice, determinations, and interpretations for purposes of determining whether a transportation network company is immune from civil penalties under this subsection (3)(b).

(c) The department shall waive any civil penalty assessed against a transportation network company under this section if the transportation network company is not a repeat willful violator, and the director determines that the transportation network company has provided payment to the driver of all compensation that the department determined that the transportation network company owed to the driver, including interest, within 30 days of the transportation network company's receipt of the citation and notice of assessment from the department.

(d) The department may waive or reduce at any time a civil penalty assessed under this section if the director determines that the transportation network company paid all compensation and interest owed to a driver.

(e) The department shall deposit civil penalties paid under this section in the supplemental pension fund established under RCW 51.44.033.

(4) Upon payment by a transportation network company, and acceptance by a driver, of all compensation and interest assessed by the department in a citation and notice of assessment issued to the transportation network company, the fact of such payment by the transportation network company, and of such acceptance by the driver, shall: (a) Constitute a full and complete satisfaction by the transportation network company of all specific requirements of section 1 of this act addressed in the citation and notice of assessment; and (b) bar the driver from initiating or pursuing any court action or other judicial or administrative proceeding, including arbitration, based on the specific requirements addressed in the citation and notice of assessment. The citation and notice of assessment shall include a notification and summary of the specific requirements of section 1 of this act.

(5) The applicable statute of limitations for civil actions is tolled during the department's investigation of a driver's complaint against a transportation network company. For the purposes of this subsection, the department's investigation begins on the date the driver files the complaint with the department and ends when: (a) The complaint is finally determined through a final and binding citation and notice of assessment or determination of compliance; or (b) the department notifies the transportation network company and the driver in writing that the complaint has been otherwise resolved or that the driver has elected to terminate the department's administrative action under subsection (12) of this section.

(6) A person, firm, or corporation aggrieved by a citation and notice of assessment or a determination of compliance issued by the department under this section or the assessment of a civil penalty due to a determination of status as a repeat willful violator may appeal the citation and notice of assessment, the determination of compliance, or the assessment of a civil penalty to the director by filing a notice of appeal with the director within 30 days of the department's service, as provided in subsection (1) of this section, on the aggrieved party of the citation and notice of assessment, the determination of compliance, or the assessment of a civil penalty. A citation and notice of assessment, a determination of compliance, or an assessment of a civil penalty not appealed within 30 days is final and binding, and not subject to further appeal.

(7) A notice of appeal filed with the director under this section shall stay the effectiveness of the citation and notice of assessment, the determination of compliance, or the assessment of a civil penalty pending final review of the appeal by the director as provided for in chapter 34.05 RCW.

(8) Upon receipt of a notice of appeal, the director shall assign the hearing to an administrative law judge of the office of administrative hearings to conduct the hearing and issue an initial order. The hearing and review procedures shall be conducted in accordance with chapter 34.05 RCW, and the standard of review by the administrative law judge of an appealed citation and notice of assessment, an appealed determination of compliance, or an appealed assessment of a civil penalty shall be de novo. Any party who seeks to challenge an initial order shall file a petition for administrative review with the director within 30 days after service of the initial order. The director shall conduct administrative review in accordance with chapter 34.05 RCW.

(9) The director shall issue all final orders after appeal of the initial order. The final order of the director is subject to judicial review in accordance with chapter 34.05 RCW.

(10) Orders that are not appealed within the time period specified in this section and chapter 34.05 RCW are final and binding, and not subject to further appeal.

(11) Absent good cause, a transportation network company that fails to allow adequate inspection of records in an investigation by the department under this chapter within a reasonable time period may not use such records in any appeal under this section to challenge the correctness of any determination by the department of wages owed or penalties assessed.

(12) A driver who has filed a complaint under this section with the department may elect to terminate the department's administrative action, thereby preserving any private right of action, if any exists, by providing written notice to the department within 10 business days after the driver's receipt of the department's citation and notice of assessment.

(13) If the driver elects to terminate the department's administrative action: (a) The department shall immediately discontinue its action against the transportation network company; (b) the department shall vacate a citation and notice of assessment already issued by the department to the transportation network company; and (c) the citation and notice of assessment, and any related findings of fact or conclusions of law by the department, and any payment or offer of payment by the transportation network company of the compensation, including interest, assessed by the department in the citation and notice of assessment, shall not be admissible in any court action or other judicial or administrative proceeding.

(14) Nothing in this section shall be construed to limit or affect: (a) The right of any driver to pursue any judicial, administrative, or other action available with respect to a transportation network company; (b) the right of the department to pursue any judicial, administrative, or other action available with respect to a driver that is identified as a result of a complaint for a violation of section 1 of this act; or (c) the right of the department to pursue any judicial, administrative, or other action available with respect to a transportation network company in the absence of a complaint for a violation of section 1 of this act. For purposes of this subsection, "driver" means a driver other than a driver who has filed a complaint with the department and who thereafter has elected to terminate the department's administrative action as provided in subsection (1) of this section.

(15) After a final order is issued under this section, and served as provided in subsection (1) of this section, if a transportation network company defaults in the payment of: (a) Any compensation determined by the department to be owed to a driver, including interest; or (b) any civil penalty ordered by the department under this section, the director may file with the clerk of any county within the state a warrant in the amount of the payment plus any filing fees. The clerk of the county in which the warrant is filed shall immediately designate a superior court cause number for the warrant, and the clerk shall cause to be entered in the judgment docket under the superior court cause number assigned to the warrant, the name of the transportation network company mentioned in the warrant, the amount of payment due plus any filing fees, and the date when the warrant was filed. The aggregate amount of the warrant as docketed becomes a lien upon the title to, and interest in, all real and personal property of the transportation network company against whom the warrant is issued, the same as a judgment in a civil case docketed with the superior court clerk. The sheriff shall proceed upon the warrant in all respects and with like effect as prescribed by law with respect to execution or other process issued against rights or property upon judgment in a court of competent jurisdiction. The warrant so docketed is sufficient to support the issuance of writs of garnishment in favor of the state in a manner provided by law in case of judgment, wholly or partially unsatisfied. The clerk of the court is entitled to a filing fee which will be added to the amount of the warrant. A copy of the warrant shall be served on the transportation network company, as provided in subsection (1) of this section, within three days of filing with the clerk.

(16)(a) The director may issue to any person, firm, corporation, other entity, municipal corporation, political subdivision of the state, public corporation, or any agency of the state, a notice and order to withhold and deliver property of any kind when he or she has reason to believe that there is in the possession of the person, firm, corporation, other entity, municipal corporation, political subdivision of the state, public corporation, or agency of the state, property that is or will become due, owing, or belonging to a transportation network company upon whom a notice of assessment has been served by the department for payments or civil penalties due to the department. The effect of a notice and order is continuous from the date the notice and order is first made until the liability out of which the notice and order arose is satisfied or becomes unenforceable because of lapse of time. The department shall release the notice and order when the liability out of which the notice and order arose is satisfied or becomes unenforceable by reason of lapse of time and shall notify the person against whom the notice and order was made that the notice and order has been released.

(b) The notice and order to withhold and deliver must be served by the sheriff of the county or by the sheriff's deputy, by certified mail, return receipt requested, or by the director. A person, firm, corporation, other entity, municipal corporation, political subdivision of the state, public corporation, or agency of the state upon whom service has been made shall answer the notice within 20 days exclusive of the day of service, under oath and in writing, and shall make true answers to the matters inquired of in the notice and order. Upon service of the notice and order, if the party served possesses any property that may be subject to the claim of the department, the party shall promptly deliver the property to the director. The director shall hold the property in trust for application on the transportation network company's indebtedness to the department, or for return without interest, in accordance with a final determination of a petition for review. In the alternative, the party shall furnish a good and sufficient surety bond satisfactory to the director conditioned upon final determination of liability. If a party served and named in the notice fails to answer the notice within the time prescribed in this section, the court may render judgment by default against the party for the full amount claimed by the director in the notice, together with costs. If a notice is served upon a transportation network company and the property subject to it is compensation, the transportation network company may assert in the answer all exemptions provided for by chapter 6.27 RCW to which the compensation earner is entitled.

(c) As an alternative to the methods of service described in this section, the department may electronically serve a financial institution with a notice and order to withhold and deliver by providing a list of its outstanding warrants, except those for which a payment agreement is in good standing, to the department of revenue. The department of revenue may include the warrants provided by the department in a notice and order to withhold and deliver served under RCW 82.32.235(3). A financial institution that is served with a notice and order to withhold and deliver under this subsection (16)(c) must answer the notice within the time period applicable to service under RCW 82.32.235(3). The department and the department of revenue may adopt rules to implement this subsection (16)(c).

(17)(a) In addition to the procedure for collection of compensation owed, including interest, and civil penalties as set forth in this section, the department may recover compensation owed, including interest, and civil penalties assessed under RCW 49.48.083 in a civil action brought in a court of competent jurisdiction of the county where the violation is alleged to have occurred.

(b) The department may use the procedures under this section to foreclose compensation liens established under chapter 60.90 RCW. When the department is foreclosing on a compensation lien, the date the compensation lien was originally filed shall be the date by which priority is determined, regardless of the date the warrant is filed under this section.

(18) Whenever any transportation network company quits business, sells out, exchanges, or otherwise disposes of the transportation network company's business or stock of goods, any person who becomes a successor to the business becomes liable for the full amount of any outstanding citation and notice of assessment or penalty against the transportation network company's business under this chapter if, at the time of the conveyance of the business, the successor has: (a) Actual knowledge of the fact and amount of the outstanding citation and notice of assessment; or (b) a prompt, reasonable, and effective means of accessing and verifying the fact and amount of the outstanding citation and notice of assessment from the department. If the citation and notice of assessment or penalty is not paid in full by the transportation network company within 10 days of the date of the sale, exchange, or disposal, the successor is liable for the payment of the full amount of the citation and notice of assessment or penalty, and payment thereof by the successor must, to the extent thereof, be deemed a payment upon the purchase price. If the payment is greater in amount than the purchase price, the amount of the difference becomes a debt due the successor from the transportation network company.

(19) This section does not affect other collection remedies that are otherwise provided by law.

NEW SECTION.  Sec. 4. A new section is added to chapter 49.46 RCW to read as follows:

(1) If a driver files a complaint with the department alleging a violation of any noncompensation requirement of section 1 (7) through (10) and (12) through (14) of this act, the department shall investigate the complaint under this section.

(a) The department may not investigate any such alleged violation that occurred more than three years before the date that the driver filed the complaint or prior to this law going into effect.

(b) If a driver files a timely complaint with the department, the department will investigate the complaint and issue either a citation assessing a civil penalty or a closure letter within 60 days after the date on which the department received the complaint, unless the complaint is otherwise resolved. The department may extend the period by providing advance written notice to the driver and the transportation network company setting forth good cause for an extension of the period, and specifying the duration of the extension.

(c) The department shall send notice of either a citation and notice of assessment or a citation assessing a civil penalty or the closure letter to both the transportation network company and the driver by service of process or by United States mail using a method by which delivery of such written notice to the transportation network company can be tracked and confirmed. A transportation network company may designate a mailing address of record for service, and additionally may provide an email address to which the department shall direct electronic courtesy copies of mailed correspondence, if such email address is provided.

(2) If the department's investigation finds that the driver's allegation cannot be substantiated, the department shall issue a closure letter to the driver and the transportation network company detailing such finding.

(3) If the department determines that the violation was a willful violation, and the transportation network company fails to take corrective action, the department may order the transportation network company to pay the department a civil penalty as specified in (a) of this subsection.

(a) A citation assessing a civil penalty for a willful violation will be $1,000 for each willful violation. For a repeat willful violator, the citation assessing a civil penalty will not be less than $2,000 for each repeat willful violation per claimant, but no greater than $20,000 for each repeat willful violation per claimant.

(b) The department may not issue a citation assessing a civil penalty if the transportation network company reasonably relied on: (i) A written order, ruling, approval, opinion, advice, determination, or interpretation of the director; or (ii) an interpretive or administrative policy issued by the department and filed with the office of the code reviser. In accordance with the department's retention schedule obligations under chapter 40.14 RCW, the department shall maintain a complete and accurate record of all written orders, rulings, approvals, opinions, advice, determinations, and interpretations for purposes of determining whether a transportation network company is immune from civil penalties under this subsection (3)(b).

(c) The department may, at any time, waive or reduce a civil penalty assessed under this section if the director determines that the transportation network company has taken corrective action to resolve the violation.

(d) The department shall deposit civil penalties paid under this section in the supplemental pension fund established under RCW 51.44.033.

(e) If the department determines that a transportation network company has violated section 1(12) of this act, and issues to the transportation network company a citation and notice of assessment, the department may order the transportation network company to pay all owed remittance payments as required under section 1(12) of this act. The department shall deposit all owed remittance payments in the driver resource center fund.

(4) For purposes of this section, the following definitions apply:

(a) "Repeat willful violator" means any transportation network company that has been the subject of a final and binding citation for a willful violation of one or more rights under this chapter and all applicable rules, within three years of the date of issuance of the most recent citation for a willful violation of one or more such rights.

(b) "Willful" means a knowing and intentional action that is neither accidental nor the result of a bona fide dispute.

(5) A person, firm, or corporation aggrieved by a citation assessing a civil penalty issued by the department under this section may appeal the citation assessing a civil penalty to the director by filing a notice of appeal with the director within 30 days of the department's issuance of the citation assessing a civil penalty. A citation assessing a civil penalty not appealed within 30 days is final and binding, and not subject to further appeal.

(6) A notice of appeal filed with the director under this section stays the effectiveness of the citation assessing a civil penalty pending final review of the appeal by the director as provided for in chapter 34.05 RCW.

(7) Upon receipt of a notice of appeal, the director shall assign the hearing to an administrative law judge of the office of administrative hearings to conduct the hearing and issue an initial order. The hearing and review procedures must be conducted in accordance with chapter 34.05 RCW, and the standard of review by the administrative law judge of an appealed citation assessing a civil penalty must be de novo. Any party who seeks to challenge an initial order shall file a petition for administrative review with the director within 30 days after service of the initial order. The director shall conduct administrative review in accordance with chapter 34.05 RCW.

(8) The director shall issue all final orders after appeal of the initial order. The final order of the director is subject to judicial review in accordance with chapter 34.05 RCW.

(9) Orders that are not appealed within the period specified in this section and chapter 34.05 RCW are final and binding, and not subject to further appeal.

(10) Absent good cause, a transportation network company that fails to allow adequate inspection of records in an investigation by the department under this section within a reasonable time period may not use such records in any appeal under such rules to challenge the correctness of any determination by the department of penalties assessed.

(11) Collections of unpaid citations assessing civil penalties will be handled pursuant to the procedures outlined in RCW 49.48.086.

(12) If the department determines that a transportation network company has violated the requirements in section 1(12) of this act to collect and remit the established fee, and issues to the transportation network company a citation and notice of assessment, the department may order the transportation network company to pay all owed remittance payments as required under section 1(12) of this act. The department shall deposit all unpaid remittance amounts into the driver resource center fund established in section 2 of this act.

NEW SECTION.  Sec. 5. A new section is added to chapter 49.46 RCW to read as follows:

(1) It is unlawful for a transportation network company to interfere with, restrain, or deny the exercise of any driver right provided under or in connection with section 1 of this act and RCW 49.46.210(5). This means a transportation network company may not use a driver's exercise of any of the rights provided under section 1 of this act and RCW 49.46.210(5) as a factor in any action that adversely affects the driver's use of the transportation network.

(2) It is unlawful for a transportation network company to adopt or enforce any policy that counts the use of earned paid sick time for a purpose authorized under RCW 49.46.210(1) (b) and (c) as time off the platform that may lead to or result in temporary or permanent deactivation by the transportation network company against the driver.

(3) It is unlawful for a transportation network company to take any adverse action against a driver because the driver has exercised their rights provided under section 1 of this act and RCW 49.46.210(5). Such rights include, but are not limited to: Filing an action, or instituting or causing to be instituted any proceeding under or related to section 1 of this act and RCW 49.46.210(5), or testifying or intending to testify in any such proceeding related to any rights provided under section 1 of this act and RCW 49.46.210(5).

(4) Adverse action means any action taken or threatened by a transportation network company against a driver for the driver's exercise of rights under section 1 of this act and RCW 49.46.210(5).

(5) A driver who believes that he or she was subject to retaliation by a transportation network company for the exercise of any driver right under section 1 of this act and RCW 49.46.210(5) may file a complaint with the department within 180 days of the alleged retaliatory action. The department may, at its discretion, extend the 180-day period on recognized equitable principles or because of extenuating circumstances beyond the control of the department. The department may extend the 180-day period when there is a preponderance of evidence that the transportation network company has concealed or misled the driver regarding the alleged retaliatory action.

(6) If a driver files a timely complaint with the department alleging retaliation, the department shall investigate the complaint and issue either a citation and notice of assessment or a determination of compliance within 90 days after the date on which the department received the complaint, unless the complaint is otherwise resolved. The department may extend the period by providing advance written notice to the driver and the transportation network company setting forth good cause for an extension of the period, and specifying the duration of the extension.

(7) The department may consider a complaint to be otherwise resolved when the driver and the transportation network company reach a mutual agreement to remedy any retaliatory action, or the driver voluntarily and on the driver's own initiative withdraws the complaint.

(8) If the department's investigation finds that the driver's allegation of retaliation cannot be substantiated, the department shall issue a determination of compliance to the driver and the transportation network company detailing such finding.

(9) If the department's investigation finds that the transportation network company retaliated against the driver, and the complaint is not otherwise resolved, the department may, at its discretion, notify the transportation network company that the department intends to issue a citation and notice of assessment, and may provide up to 30 days after the date of such notification for the transportation network company to take corrective action to remedy the retaliatory action. If the complaint is not otherwise resolved, then the department shall issue a citation and notice of assessment. The department's citation and notice of assessment may:

(a) Order the transportation network company to make payable to the driver earnings that the driver did not receive due to the transportation network company's retaliatory action, including interest of one percent per month on all earnings owed. The earnings and interest owed will be calculated from the first date earnings were owed to the driver;

(b) Order the transportation network company to restore the contract of the driver, unless otherwise prohibited by law;

(c) Order the transportation network company to cease using any policy that counts the use of earned paid sick time as time off the platform or an adverse action against the driver;

(d) For the first violation, order the transportation network company to pay the department a civil penalty established in subsection (15) of this section; and

(e) For a repeat violation, order the transportation network company to pay the department up to double the civil penalty established in subsection (15) of this section.

(10) The department shall send the citation and notice of assessment or determination of compliance to both the transportation network company and driver by service of process or using a method by which the mailing can be tracked or the delivery can be confirmed to their last known addresses. A transportation network company may designate a mailing address of record for service, and additionally may provide an email address to which the department shall direct electronic courtesy copies of mailed correspondence, if such email address is provided.

(11) During an investigation of the driver's retaliation complaint, if the department discovers information suggesting alleged violations by the transportation network company of the driver's other rights under this chapter, and all applicable rules, the department may investigate and take appropriate enforcement action without requiring the driver to file a new or separate complaint. In the event the department so expands an investigation, it shall provide reasonable notice to the transportation network company that it is doing so. If the department determines that the transportation network company violated additional rights of the driver under this chapter, and all applicable rules, the transportation network company may be subject to additional enforcement actions for the violation of such rights. If the department discovers information alleging the transportation network company retaliated against or otherwise violated rights of other drivers under this chapter, and all applicable rules, the department may launch further investigation under this chapter, and all applicable rules, without requiring additional complaints to be filed.

(12) The department may prioritize retaliation investigations as needed to allow for timely resolution of complaints.

(13) Nothing in this section impedes the department's ability to investigate under the authority prescribed in RCW 49.48.040.

(14) Nothing in this section precludes a driver's right to pursue private legal action, if any exists.

(15) If the department's investigation finds that a transportation network company retaliated against a driver, pursuant to the procedures outlined in this section, the department may order the transportation network company to pay the department a civil penalty. A civil penalty for a transportation network company's retaliatory action will not be less than $1,000 or an amount equal to 10 percent of the total amount of unpaid earnings attributable to the retaliatory action per claimant, whichever is greater. The maximum civil penalty for a transportation network company's retaliatory action shall be $20,000 per claimant for the first violation, and $40,000 for each repeat violation.

(16) The department may, at any time, waive or reduce any civil penalty assessed against a transportation network company under this section if the department determines that the transportation network company has taken corrective action to remedy the retaliatory action.

(17) The department will deposit civil penalties paid under this section in the supplemental pension fund established under RCW 51.44.033.

(18) Collections of amounts owed for unpaid citations and notices of assessment, as detailed in this section, will be handled pursuant to the procedures outlined in RCW 49.48.086.

(19) A person, firm, or corporation aggrieved by a citation and notice of assessment or a determination of compliance may, within 30 days after the date of such determination, submit a request for reconsideration to the department setting forth the grounds for seeking such reconsideration, or submit an appeal to the director pursuant to the procedures outlined in subsection (22) of this section. If the department receives a timely request for reconsideration, the department shall either accept the request or treat the request as a notice of appeal.

(20) If a request for reconsideration is accepted, the department shall send notice of the request for reconsideration to the transportation network company and the driver. The department shall determine if there are any valid reasons to reverse or modify the department's original decision to issue a citation and notice of assessment or determination of compliance within 30 days of receipt of such request. The department may extend this period by providing advance written notice to the driver and transportation network company setting forth good cause for an extension of the period, and specifying the duration of the extension. After reviewing the reconsideration, the department shall either:

(a) Notify the driver and the transportation network company that the citation and notice of assessment or determination of compliance is affirmed; or

(b) Notify the driver and the transportation network company that the citation and notice of assessment or determination of compliance has been reversed or modified.

(21) A request for reconsideration submitted to the department shall stay the effectiveness of the citation and notice of assessment or the determination of compliance pending the reconsideration decision by the department.

(22)(a) Within 30 days after the date the department issues a citation and notice of assessment or a determination of compliance, or within 30 days after the date the department issues its decision on the request for reconsideration, a person, firm, or corporation aggrieved by a citation and notice of assessment or a determination of compliance may file with the director a notice of appeal.

(b) A notice of appeal filed with the director under this section shall stay the effectiveness of the citation and notice of assessment or the determination of compliance pending final review of the appeal by the director as provided for in chapter 34.05 RCW.

(c) Upon receipt of a notice of appeal, the director shall assign the hearing to an administrative law judge of the office of administrative hearings to conduct the hearing and issue an initial order. The hearing and review procedures shall be conducted in accordance with chapter 34.05 RCW, and the standard of review by the administrative law judge of an appealed citation and notice of assessment or determination of compliance shall be de novo. Any party who seeks to challenge an initial order shall file a petition for administrative review with the director within 30 days after service of the initial order. The director shall conduct administrative review in accordance with chapter 34.05 RCW.

(23) If a request for reconsideration is not submitted to the department within 30 days after the date of the original citation and notice of assessment or determination of compliance, and a person, firm, or corporation aggrieved by a citation and notice of assessment or determination of compliance did not submit an appeal to the director, then the citation and notice of assessment or determination of compliance is final and binding, and not subject to further appeal.

(24) The director shall issue all final orders after appeal of the initial order. The final order of the director is subject to judicial review in accordance with chapter 34.05 RCW.

(25) The director's orders that are not appealed within the time period specified in this section and chapter 34.05 RCW are final and binding, and not subject to further appeal.

(26) Absent good cause, a transportation network company that fails to allow adequate inspection of records in an investigation by the department under this section within a reasonable time period may not use such records in any appeal under such rules to challenge the correctness of any determination by the department.

Sec. 6. RCW 49.46.210 and 2019 c 236 s 3 are each 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) An employee shall accrue at least one hour of paid sick leave for every forty 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) An employee is authorized to use paid sick leave for the following reasons:

(i) 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) 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) 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 reason.

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

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

(f) 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) 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) 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) 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 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) Unused paid sick leave carries over to the following year, except that an employer is not required to allow an employee to carry over paid sick leave in excess of forty hours.

(k) This section does not require an employer 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 twelve 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 subsection (1)(d) of this section.

(2) For purposes of this section, "family member" means any of the following:

(a) A child, including a biological, adopted, or foster child, stepchild, or a child to whom the employee stands in loco parentis, is a legal guardian, or is a de facto parent, regardless of age or dependency status;

(b) A biological, adoptive, de facto, or foster parent, stepparent, or legal guardian of an employee or the employee's spouse or registered domestic partner, or a person who stood in loco parentis when the employee was a minor child;

(c) A spouse;

(d) A registered domestic partner;

(e) A grandparent;

(f) A grandchild; or

(g) A sibling.

(3) An employer may not adopt or enforce any policy that counts the use of paid sick leave time as an absence that may lead to or result in discipline against the employee.

(4) An employer may not discriminate or retaliate against an employee for his or her exercise of any rights under this chapter including the use of paid sick leave.

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

(1) If a driver files a complaint with the department alleging that the transportation network company failed to provide the driver with earned paid sick time as provided in RCW 49.46.210, the department shall investigate the complaint as an alleged violation of a compensation-related requirement of section 1 of this act.

(2) When the department's investigation results in a finding that the transportation network company failed to provide the driver with earned paid sick time accrual, use, or carryover during an ongoing contractual relationship, the driver may elect to:

(a) Receive full access to the balance of accrued earned paid sick time hours unlawfully withheld by the transportation network company, based on a calculation of one hour of earned paid sick time for every 40 hours of passenger platform time worked; or

(b) Receive payment from the transportation network company at their average hourly compensation for each hour of earned paid sick time that the driver would have used or been reasonably expected to use, whichever is greater, during the period of noncompliance, not to exceed an amount the driver would have otherwise accrued. The driver will receive full access to the balance of accrued earned paid sick time unlawfully withheld by the transportation network company, less the number of earned paid sick time paid out to the driver pursuant to this subsection.

(3) For a driver whose contract with the transportation network company is terminated or who has not recorded passenger platform time on the transportation network company's driver platform for 365 days or more, when the department's investigation results in a finding that the transportation network company failed to provide the driver with earned paid sick time accrual, use, or carryover, the driver may elect to receive payment at their average hourly compensation for earned paid sick time that the driver would have earned or been reasonably expected to use, whichever is greater, during the period of noncompliance, receive reinstatement of the balance of earned paid sick time, or receive a combination of payment and reinstatement from the transportation network company for all earned paid sick time that would have accrued during the period of noncompliance, unless such reinstatement is prohibited by law.

(4) The department's notice of assessment, pursuant to RCW 49.48.083, may order the transportation network company to provide the driver any combination of reinstatement and payment of accrued, unused earned paid sick time assessed pursuant to subsection (2) or (3) of this section, unless such reinstatement is prohibited by law.

(5) For purposes of this section, a transportation network company found to be in noncompliance cannot cap the driver's carryover of earned paid sick time at 40 hours to the following year for each year of noncompliance.

(6) The department may promulgate rules and regulations in accordance with this section.

Sec. 8. RCW 51.12.020 and 2015 c 236 s 4 are each amended to read as follows:

The following are the only employments which shall not be included within the mandatory coverage of this title:

(1) Any person employed as a domestic servant in a private home by an employer who has less than two employees regularly employed forty or more hours a week in such employment.

(2) Any person employed to do gardening, maintenance, or repair, in or about the private home of the employer. For the purposes of this subsection, "maintenance" means the work of keeping in proper condition, "repair" means to restore to sound condition after damage, and "private home" means a person's place of residence.

(3) A person whose employment is not in the course of the trade, business, or profession of his or her employer and is not in or about the private home of the employer.

(4) Any person performing services in return for aid or sustenance only, received from any religious or charitable organization.

(5) Sole proprietors or partners.

(6) Any child under eighteen years of age employed by his or her parent or parents in agricultural activities on the family farm.

(7) Jockeys while participating in or preparing horses for race meets licensed by the Washington horse racing commission pursuant to chapter 67.16 RCW.

(8)(a) Except as otherwise provided in (b) of this subsection, any bona fide officer of a corporation voluntarily elected or voluntarily appointed in accordance with the articles of incorporation or bylaws of the corporation, who at all times during the period involved is also a bona fide director, and who is also a shareholder of the corporation. Only such officers who exercise substantial control in the daily management of the corporation and whose primary responsibilities do not include the performance of manual labor are included within this subsection.

(b) Alternatively, a corporation that is not a "public company" as defined in RCW 23B.01.400 may exempt eight or fewer bona fide officers, who are voluntarily elected or voluntarily appointed in accordance with the articles of incorporation or bylaws of the corporation and who exercise substantial control in the daily management of the corporation, from coverage under this title without regard to the officers' performance of manual labor if the exempted officer is a shareholder of the corporation, or may exempt any number of officers if all the exempted officers are related by blood within the third degree or marriage. If a corporation that is not a "public company" elects to be covered under ((subsection (8)))(a) of this subsection, the corporation's election must be made on a form prescribed by the department and under such reasonable rules as the department may adopt.

(c) Determinations respecting the status of persons performing services for a corporation shall be made, in part, by reference to Title 23B RCW and to compliance by the corporation with its own articles of incorporation and bylaws. For the purpose of determining coverage under this title, substance shall control over form, and mandatory coverage under this title shall extend to all workers of this state, regardless of honorary titles conferred upon those actually serving as workers.

(d) A corporation may elect to cover officers who are exempted by this subsection in the manner provided by RCW 51.12.110.

(9) Services rendered by a musician or entertainer under a contract with a purchaser of the services, for a specific engagement or engagements when such musician or entertainer performs no other duties for the purchaser and is not regularly and continuously employed by the purchaser. A purchaser does not include the leader of a group or recognized entity who employs other than on a casual basis musicians or entertainers.

(10) Services performed by a 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.

(11) Services performed by an insurance producer, as defined in RCW 48.17.010, or a surplus line broker licensed under chapter 48.15 RCW.

(12) Services performed by a booth renter. However, a person exempted under this subsection may elect coverage under RCW 51.32.030.

(13) Members of a limited liability company, if either:

(a) Management of the company is vested in its members, and the members for whom exemption is sought would qualify for exemption under subsection (5) of this section were the company a sole proprietorship or partnership; or

(b) Management of the company is vested in one or more managers, and the members for whom the exemption is sought are managers who would qualify for exemption under subsection (8) of this section were the company a corporation.

(14) ((A driver providing commercial transportation services as defined in RCW 48.177.005. The driver may elect coverage in the manner provided by RCW 51.32.030.

(15))) For hire vehicle operators under chapter 46.72 RCW who own or lease the for hire vehicle, chauffeurs under chapter 46.72A RCW who own or lease the limousine, and operators of taxicabs under chapter 81.72 RCW who own or lease the taxicab. An owner or lessee may elect coverage in the manner provided by RCW 51.32.030.

Sec. 9. RCW 51.08.070 and 2008 c 102 s 2 are each amended to read as follows:

(1) "Employer" means any person, body of persons, corporate or otherwise, and the legal representatives of a deceased employer, all while engaged in this state in any work covered by the provisions of this title, by way of trade or business, or who contracts with one or more workers, the essence of which is the personal labor of such worker or workers. Or as an exception to the definition of employer, persons or entities are not employers when they contract or agree to remunerate the services performed by an individual who meets the tests set forth in ((subsections (1) through (6) of)) RCW 51.08.195 (1) through (6) or the separate tests set forth in RCW 51.08.181 for work performed that requires registration under chapter 18.27 RCW or licensing under chapter 19.28 RCW.

Sec. 10. RCW 51.08.180 and 2008 c 102 s 3 are each amended to read as follows:

(1) "Worker" means every person in this state who is engaged in the employment of an employer under this title, whether by way of manual labor or otherwise in the course of his or her employment; also every person in this state who is engaged in the employment of or who is working under an independent contract, the essence of which is his or her personal labor for an employer under this title, whether by way of manual labor or otherwise, in the course of his or her employment, or as an exception to the definition of worker, a person is not a worker if he or she meets the tests set forth in subsections (1) through (6) of RCW 51.08.195 or the separate tests set forth in RCW 51.08.181 for work performed that requires registration under chapter 18.27 RCW or licensing under chapter 19.28 RCW: PROVIDED, That a person is not a worker for the purpose of this title, with respect to his or her activities attendant to operating a truck which he or she owns, and which is leased to a common or contract carrier.

NEW SECTION.  Sec. 11. A new section is added to chapter 51.16 RCW to read as follows:

(1) Beginning January 1, 2023, the department shall assess premiums for transportation network companies, as defined in section 1 of this act, in accordance with RCW 51.16.035 and this section, for workers' compensation coverage applicable to drivers, as defined in section 1 of this act, while the driver is engaged in passenger platform time and dispatch platform time, as those terms are defined in section 1 of this act.

(2) For the purposes of calculating the premium for drivers under subsection (1) of this section, the department shall multiply the total number of hours spent by drivers in passenger platform time and dispatch platform time on the transportation network company's driver platform by the rates established for taxicab companies. The department may subsequently adjust premiums in accordance with department rules.

(3) Transportation network companies, not qualifying as a self-insurer, shall insure with the state and shall, on or before the last day of January, April, July, and October of each year thereafter, furnish the department with a true and accurate statement of the hours for which drivers, as defined in section 1 of this act, were engaged in passenger platform time and dispatch platform time on the transportation network company's driver platform during the preceding calendar quarter and the total amount paid to such drivers engaged in passenger platform time on the transportation network company's driver platform during the preceding calendar quarter, and shall pay its premium based on the total passenger platform time and dispatch platform time to the appropriate fund. Premiums for a calendar quarter, whether reported or not, shall become due and delinquent on the day immediately following the last day of the month following the calendar quarter. The sufficiency of such statement shall be subject to the approval of the director: PROVIDED, That the director may in his or her discretion and for the effective administration of this title require a transportation network company in individual instances to furnish a supplementary report containing the name of each individual driver, his or her hours engaged in passenger platform time and dispatch platform time on the transportation network company's driver platform, and his or her compensation: PROVIDED FURTHER, That the department may promulgate rules and regulations in accordance with chapter 34.05 RCW to establish other reporting periods and payment due dates in lieu of reports and payments following each calendar quarter, and may also establish terms and conditions for payment of premiums and assessments based on estimated passenger platform time and dispatch platform time on the transportation network company's driver platform, with such payments being subject to approval as to sufficiency of the estimated passenger platform time and dispatch platform time on the transportation network company's driver platform by the department, and also subject to appropriate periodic adjustments made by the department based on actual passenger platform time and dispatch platform time on the transportation network company's driver platform.

(4) The department may adopt rules to carry out the purposes of this section, including rules providing for alternative reporting requirements.

(5) This section does not apply to any worker who is not a driver, and who is employed by the transportation network company. For those workers the processes for determining coverage, calculating premiums, reporting requirements, reporting periods, and payment due dates are subject to the provisions of this title that apply generally to employers and workers.

Sec. 12. RCW 51.16.060 and 1985 c 315 s 1 are each amended to read as follows:

((Every))Except as provided in section 11 of this act, every employer not qualifying as a self-insurer, shall insure with the state and shall, on or before the last day of January, April, July and October of each year thereafter, furnish the department with a true and accurate payroll for the period in which workers were employed by it during the preceding calendar quarter, the total amount paid to such workers during such preceding calendar quarter, and a segregation of employment in the different classes established pursuant to this title, and shall pay its premium thereon to the appropriate fund. Premiums for a calendar quarter, whether reported or not, shall become due and delinquent on the day immediately following the last day of the month following the calendar quarter. The sufficiency of such statement shall be subject to the approval of the director: PROVIDED, That the director may in his or her discretion and for the effective administration of this title require an employer in individual instances to furnish a supplementary report containing the name of each individual worker, his or her hours worked, his or her rate of pay and the class or classes in which such work was performed: PROVIDED FURTHER, That in the event an employer shall furnish the department with four consecutive quarterly reports wherein each such quarterly report indicates that no premium is due the department may close the account: PROVIDED FURTHER, That the department may promulgate rules and regulations in accordance with chapter 34.05 RCW to establish other reporting periods and payment due dates in lieu of reports and payments following each calendar quarter, and may also establish terms and conditions for payment of premiums and assessments based on estimated payrolls, with such payments being subject to approval as to sufficiency of the estimated payroll by the department, and also subject to appropriate periodic adjustments made by the department based on actual payroll: AND PROVIDED FURTHER, That a temporary help company which provides workers on a temporary basis to its customers shall be considered the employer for purposes of reporting and paying premiums and assessments under this title according to the appropriate rate classifications as determined by the department: PROVIDED, That the employer shall be liable for paying premiums and assessments, should the temporary help company fail to pay the premiums and assessments under this title.

NEW SECTION.  Sec. 13. A new section is added to chapter 51.04 RCW to read as follows:

(1) The application of this chapter to a transportation network company, as defined in section 1 of this act, shall not be indicative of, or considered a factor in determining, the existence of an employer-employee relationship between the transportation network company and driver for purposes of any other rights, benefits, or obligations under other state and local employment laws.

(2) A transportation network company's compliance with this chapter satisfies any obligation under any county, city, town, or other municipal corporation ordinance requiring compensation or benefits for workplace injuries or occupational disease.

(1) "Department" means the department of licensing.

(2) "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.

(3) "Director" means the director of the department of licensing.

(4) "Driver" has the meaning provided in section 1 of this act.

(5) "Network services" has the meaning provided in section 1 of this act.

(6) "Passenger" means an individual who uses a digital network to connect with a driver in order to obtain a prearranged ride in the driver's transportation network company vehicle. A person may use a digital network to request a prearranged ride on behalf of a passenger.

(7) "Prearranged ride" has the same meaning provided in RCW 48.177.005.

(8) "Transportation network company" has the meaning provided in section 1 of this act.

(9) "Transportation network company vehicle" has the same meaning as "personal vehicle" in RCW 48.177.005.

(2) A driver is not required to register a transportation network company vehicle as a commercial vehicle or for hire vehicle.

(2) The department must annually issue a permit to each applicant that meets the requirements for a transportation network company as set forth in this chapter and pays an annual permit fee of $5,000 to the department.

(2) During the first seven days of a state of emergency, as declared by the governor or the president of the United States, a transportation network company may not charge a fare for transportation network company services provided to any passenger that exceeds two and one-half times the fare that would otherwise be applicable for the prearranged ride.

(2) A transportation network company must provide notice of this policy on its website, as well as procedures to report a complaint about a driver with whom a passenger was matched and whom the passenger reasonably suspects was under the influence of drugs or alcohol during the course of the trip.

(3) A transportation network company must maintain records relevant to the enforcement of the policy under this section for a period of at least two years from the date that a passenger complaint is received by the transportation network company.

(a) The individual must submit an application to the transportation network company, which includes information regarding his or her name, address, phone number, age, driver's license number, motor vehicle registration, automobile liability insurance, and other information required by the transportation network company;

(b) The transportation network company, or a designated third party on behalf of the transportation network company, that is either nationally accredited or approved by the director, must conduct an annual local and national criminal background check for the applicant to include a review of:

(i) A multistate/multijurisdiction criminal records locator or other similar commercial nationwide database with validation; and

(ii) The United States department of justice national sex offender public website; and

(c) The transportation network company, or designated third party, must obtain and review a driving history report for the individual.

(2) A transportation network company must not permit an individual to act as a driver on its digital network who:

(a) Has had more than three moving violations in the prior three-year period, or one of the following major violations in the prior three-year period:

(i) Attempting to elude the police pursuant to RCW 46.61.024;

(ii) Reckless driving pursuant to RCW 46.61.500; or

(iii) Driving on a suspended or revoked driver's license pursuant to RCW 46.20.342 or 46.20.345;

(b) Has been convicted, within the past seven years, of:

(i) Any class A or B felony in Title 9A RCW;

(ii) Any violent offense as defined in RCW 9.94A.030 or serious violent offense as defined in RCW 9.94A.030;

(iii) Any most serious offense as defined in RCW 9.94A.030; or

(iv) Driving under the influence, hit and run, or any other driving-related crime pursuant to RCW 46.61.500 through 46.61.540;

(c) Has been convicted of any sex offense as defined in RCW 9.94A.030 or is a match in the United States department of justice national sex offender public website;

(d) Does not possess a valid driver's license;

(e) Does not possess proof of automobile liability insurance for the motor vehicle or vehicles used to provide prearranged rides;

(f) Is not at least 20 years of age; or

(g) Has not self-certified that he or she is physically and mentally fit to be a transportation network company driver.

(3)(a) Subsection (2)(a) and (b) of this section applies to any conviction of any offense committed in another jurisdiction that includes all of the elements of any of the offenses described or defined in subsection (2)(a) and (b) of this section.

(b) Any collision where the driver can demonstrate, through the account deactivation appeals process outlined in section 1(15) of this act, that he or she was not at fault for the collision, shall not be considered to be a moving violation under subsection (2)(a) of this section.

(c) For purposes of subsection (2)(a) of this section multiple moving violations shall be treated by the transportation network company as a single moving violation if the driver can demonstrate, through the account deactivation appeals process outlined in section 1(15) of this act, that the violations arose from a single incident.

(4) A transportation network company must establish a clear background check policy consistent with this section that informs drivers of any thresholds for categories of violations and any other factors which will result in a restriction of access to the driver platform.

(1) Solicit or accept a trip request to provide network services other than a trip request arranged through a transportation network company's digital network;

(2) Provide network services for more than 14 consecutive hours in a 24-hour period; or

(3) Allow any other individual to use that driver's access to a transportation network company's digital network.

(2) A driver must comply with all applicable laws regarding nondiscrimination against transportation network company riders or potential riders on the basis of race, color, national origin, citizenship or immigration status, families with children, creed, religious belief or affiliation, sex, marital status, the presence of any sensory, mental, or physical disability, age, honorably discharged veteran or military status, sexual orientation, gender expression or gender identity, or any other protected class under RCW 49.60.010.

(3) A driver must comply with all applicable laws relating to the transportation of service animals.

(4) A transportation network company may not impose additional charges for providing services to persons with disabilities because of those disabilities.

(1) Individual trip records, except receipts pursuant to section 1(9) of this act, for at least three years from the end of the calendar year in which each trip was provided; and

(2) Individual records of drivers, except receipts pursuant to section 1(9) of this act, at least until the end of the calendar year marking the three-year anniversary of the date on which a driver's relationship with the transportation network company has ended.

(2) Records provided to the department for inspection under this chapter are exempt from disclosure under chapter 42.56 RCW and are confidential and not subject to disclosure to a third party by the department without prior written consent of the transportation network company.

(2) Drivers shall have all rights and remedies available under chapter 49.60 RCW solely to enforce this section.

(2)(a) Except as provided in (b) and (c) of this subsection, a local ordinance or regulation, in a city with a population of more than 600,000 or a county with a population of more than 2,000,000, existing on or before January 1, 2022, that imposes a tax, fee, or other charge on a transportation network company or driver, remains in effect at the rate that exists on or before January 1, 2022. The city or county may continue to collect that tax, fee, or other charge, but may not increase the amount of that tax, fee, or other charge, and may not impose any higher or new taxes, fees, or other charges. This subsection (2)(a) applies retroactively and preempts any increase in the amount of an existing tax, fee, or other charge, or the imposition of any higher or new taxes, fees, or other charges, which occurs between January 2, 2022, and the effective date of this section.

(b) Beginning on January 1, 2023, any local ordinance or regulation, in a city or county described in (a) of this subsection, existing on or before the effective date of this section that imposed a per trip tax, fee, or other charge for which, at the time the ordinance became effective, the proceeds were to be used in part to fund a driver conflict resolution center, shall be reduced by $0.15. The city or county may continue to collect that tax, fee, or other charge, but only at the reduced rate and may not increase the amount of that tax, fee, or other charge, and may not impose any higher or new taxes, fees, or other charges.

(c) Any per ride fee imposed by a local ordinance or regulation described in (a) of this subsection, the proceeds of which are used to offset expenses of enforcing the ordinance or regulation, may be adjusted under the following provisions:

(i) The city or county demonstrates to the satisfaction of the department that the revenues from the existing per ride fee amount are insufficient to offset the city's or county's cost from enforcement and regulation;

(ii) The total amount expected to be collected under the increased amount will not exceed the city or county's total expected costs; and

(iii) The department has not authorized an increase in the per ride fee in the last two fiscal years.

(3)(a) A local ordinance or regulation in a city with a population of more than six hundred thousand or a county with a population of more than two million, and that existed on or before January 1, 2022, that defined and regulated licensing for transportation network companies and permits for drivers, or the requirements for and processing of applications, certifications, examinations, and background checks for drivers and personal vehicles, remains in effect as the requirements exist on the effective date of this section. The county or city may continue to enforce the ordinance or regulation but may not alter, amend, or implement changes to the ordinance or regulation, or requirements under it, after January 1, 2022, except if such alteration, amendment, or implementation conforms with the requirements of this chapter. This subsection shall apply retroactively to any alteration, amendment, or implementation which occurs between March 10, 2022, and the effective date of this section.

(b) Notwithstanding subsection (1) of this section, a local ordinance or regulation in a city with a population of more than six hundred thousand or a county with a population of more than two million, and that existed before January 1, 2022, that is related to requirements covered by sections 1 and 6 through 13 of this act are preempted as of January 1, 2023. The city may continue to enforce the local ordinance or regulation between the effective date of this section and January 1, 2023, but may not alter, amend, or implement changes to the ordinance or regulation, or requirements under it, after January 1, 2022, except if such alteration, or amendment, or implementation conforms with the requirements of this act. This subsection shall apply retroactively to any alteration, amendment, or implementation which occurs between March 10, 2022, and the effective date of this section.

(4) Nothing in this chapter shall be interpreted to prevent an airport operator, as defined in RCW 14.08.015, from requiring a transportation network company to enter into a contract or agreement, consistent with the provisions of RCW 14.08.120, governing requirements of the transportation network company on airport property including but not limited to the fees and operational requirements. An airport operator may not impose any requirements through a contract authorized by this section that relate to requirements covered by sections 1, 7, 11, and 13 of this act and RCW 49.46.210(5), 51.08.070, 51.08.180, 51.12.020, and 51.16.060.

(5) Other than taxes, fees, or other charges imposed explicitly or exclusively on a transportation network company or driver, this section does not preempt any generally applicable taxes, fees, or other charges, such as:

(a) Business tax;

(b) Sales and use tax;

(c) Excise tax; or

(d) Property tax.

Sec. 33. RCW 48.177.010 and 2015 c 236 s 2 are each amended to read as follows:

(1)(a) Before being used to provide commercial transportation services, as defined in RCW 48.177.005, every personal vehicle, as defined in RCW 48.177.005, must be covered by a primary automobile insurance policy that specifically covers commercial transportation services. However, the insurance coverage requirements of this section are alternatively satisfied by securing coverage pursuant to chapter 46.72 or 46.72A RCW that covers the personal vehicle being used to provide commercial transportation services and that is in effect twenty-four hours per day, seven days per week. Except as provided in subsection (2) of this section, a commercial transportation services provider, as defined in RCW 48.177.005, must secure this policy for every personal vehicle used to provide commercial transportation services. For purposes of this section, a "primary automobile insurance policy" is not a private passenger automobile insurance policy.

(b) The primary automobile insurance policy required under this section must provide coverage, as specified in this subsection (1)(b), at all times the driver is logged in to a commercial transportation services provider's digital network or software application and at all times a passenger is in the vehicle as part of a prearranged ride.

(i) The primary automobile insurance policy required under this subsection must provide the following coverage during commercial transportation services applicable during the period before a driver accepts a requested ride through a digital network or software application:

(A) Liability coverage in an amount no less than fifty thousand dollars per person for bodily injury, one hundred thousand dollars per accident for bodily injury of all persons, and thirty thousand dollars for damage to property;

(B) Underinsured motorist coverage to the extent required under RCW 48.22.030; and

(C) Personal injury protection coverage to the extent required under RCW 48.22.085 and 48.22.095.

(ii) The primary automobile insurance policy required under this subsection must provide the following coverage, applicable during the period of a prearranged ride:

(A) Combined single limit liability coverage in the amount of one million dollars for death, personal injury, and property damage; and

(B) ((Underinsured motorist coverage in the amount of one million dollars; and

(C))) Personal injury protection coverage to the extent required under RCW 48.22.085 and 48.22.095.

(2)(a) As an alternative to the provisions of subsection (1) of this section, ((if the office of the insurance commissioner approves the offering of an insurance policy that recognizes that a person is acting as a driver for a commercial transportation services provider and using a personal vehicle to provide commercial transportation services,)) a driver may secure a primary automobile insurance policy covering a personal vehicle and providing the same coverage as required in subsection (1) of this section from a lawful admitted or surplus lines insurer. The policy coverage may be in the form of a rider to, or endorsement of, the driver's private passenger automobile insurance policy only if approved as such by the office of the insurance commissioner.

(b) If the primary automobile insurance policy maintained by a driver to meet the obligation of this section does not provide coverage for any reason, including that the policy lapsed or did not exist, the commercial transportation services provider must provide the coverage required under this section beginning with the first dollar of a claim.

(c) The primary automobile insurance policy required under this subsection and subsection (1) of this section may be secured by any of the following:

(i) The commercial transportation services provider as provided under subsection (1) of this section;

(ii) The driver as provided under (a) of this subsection; or

(iii) A combination of both the commercial transportation services provider and the driver.

(3) The insurer or insurers providing coverage under subsections (1) and (2) of this section are the only insurers having the duty to defend any liability claim from an accident occurring while commercial transportation services are being provided.

(4) In addition to the requirements in subsections (1) and (2) of this section, before allowing a person to provide commercial transportation services as a driver, a commercial transportation services provider must provide written proof to the driver that the driver is covered by a primary automobile insurance policy that meets the requirements of this section. Alternatively, if a driver purchases a primary automobile insurance policy as allowed under subsection (2) of this section, the commercial transportation services provider must verify that the driver has done so.

(5) A primary automobile insurance policy required under subsection (1) or (2) of this section may be placed with an insurer licensed under this title to provide insurance in the state of Washington or as an eligible surplus line insurance policy as described in RCW 48.15.040, or through a surplus lines insurer that meets the financial requirements as described in RCW 48.15.090 and follows the procurement procedures of RCW 48.15.040.

(6) Insurers that write automobile insurance in Washington may exclude any and all coverage afforded under a private passenger automobile insurance policy issued to an owner or operator of a personal vehicle for any loss or injury that occurs while a driver for a commercial transportation services provider is logged in to a commercial transportation services provider's digital network or while a driver provides a prearranged ride. This right to exclude all coverage may apply to any coverage included in a private passenger automobile insurance policy including, but not limited to:

(a) Liability coverage for bodily injury and property damage;

(b) Personal injury protection coverage;

(c) Underinsured motorist coverage;

(d) Medical payments coverage;

(e) Comprehensive physical damage coverage; and

(f) Collision physical damage coverage.

(7) Nothing in this section shall be construed to require a private passenger automobile insurance policy to provide primary or excess coverage or a duty to defend for the period of time in which a driver is logged in to a commercial transportation services provider's digital network or software application or while the driver is engaged in a prearranged ride or the driver otherwise uses a vehicle to transport passengers for compensation.

(8) Insurers that exclude coverage under subsection (6) of this section have no duty to defend or indemnify any claim expressly excluded under subsection (6) of this section. Nothing in this section shall be deemed to invalidate or limit an exclusion contained in a policy, including any policy in use or approved for use in Washington state before July 24, 2015, that excludes coverage for vehicles used to carry persons or property for a charge or available for hire by the public.

(9) An exclusion exercised by an insurer in subsection (6) of this section applies to any coverage selected or rejected by a named insured under RCW 48.22.030 and 48.22.085. The purchase of a rider or endorsement by a driver under subsection (2)(a) of this section does not require a separate coverage rejection under RCW 48.22.030 or 48.22.085.

(10) If more than one insurance policy provides valid and collectible coverage for a loss arising out of an occurrence involving a motor vehicle operated by a driver, the responsibility for the claim must be divided as follows:

(a) Except as provided otherwise under subsection (2)(c) of this section, if the driver has been matched with a passenger and is traveling to pick up the passenger, or the driver is providing services to a passenger, the commercial transportation services provider that matched the driver and passenger must provide insurance coverage; or

(b) If the driver is logged in to the digital network or software application of more than one commercial transportation services provider but has not been matched with a passenger, the liability must be divided equally among all of the applicable insurance policies that specifically provide coverage for commercial transportation services.

(11) In an accident or claims coverage investigation, a commercial transportation services provider or its insurer must cooperate with a private passenger automobile insurance policy insurer and other insurers that are involved in the claims coverage investigation to facilitate the exchange of information, including the provision of (a) dates and times at which an accident occurred that involved a participating driver and (b) within ten business days after receiving a request, a copy of the provider's electronic record showing the precise times that the participating driver logged on and off the provider's digital network or software application on the day the accident or other loss occurred. The commercial transportation services provider or its insurer must retain all data, communications, or documents related to insurance coverage or accident details for a period of not less than the applicable statutes of limitation, plus two years from the date of an accident to which those records pertain.

(12) This section does not modify or abrogate any otherwise applicable insurance requirement set forth in this title.

(13) After July 1, 2016, an insurance company regulated under this title may not deny an otherwise covered claim arising exclusively out of the personal use of the private passenger automobile solely on the basis that the insured, at other times, used the private passenger automobile covered by the policy to provide commercial transportation services.

(14) If an insurer for a commercial transportation services provider makes a payment for a claim covered under comprehensive coverage or collision coverage, the commercial transportation services provider must cause its insurer to issue the payment directly to the business repairing the vehicle or jointly to the owner of the vehicle and the primary lienholder on the covered vehicle.

(15)(a) To be eligible for securing a primary automobile insurance policy under this section, a commercial transportation services provider must make the following disclosures to a prospective driver in the prospective driver's terms of service:

WHILE OPERATING ON THE DIGITAL NETWORK OR SOFTWARE APPLICATION OF THE COMMERCIAL TRANSPORTATION SERVICES PROVIDER, YOUR PRIVATE PASSENGER AUTOMOBILE INSURANCE POLICY MIGHT NOT AFFORD LIABILITY, UNDERINSURED MOTORIST, PERSONAL INJURY PROTECTION, COMPREHENSIVE, OR COLLISION COVERAGE, DEPENDING ON THE TERMS OF THE POLICY.

IF THE VEHICLE THAT YOU PLAN TO USE TO PROVIDE COMMERCIAL TRANSPORTATION SERVICES FOR OUR COMPANY HAS A LIEN AGAINST IT, YOU MUST NOTIFY THE LIENHOLDER THAT YOU WILL BE USING THE VEHICLE FOR COMMERCIAL TRANSPORTATION SERVICES THAT MAY VIOLATE THE TERMS OF YOUR CONTRACT WITH THE LIENHOLDER.

(b) The prospective driver must acknowledge the terms of service electronically or by signature.

(2) No later than December 1, 2022, and in compliance with RCW 43.01.036, the commissioner must submit a report to the governor and the legislature on findings and suggested changes to state law to establish applicable rates and terms by which transportation network companies and drivers participate in relevant state run programs established pursuant to Titles 50, 50A, and 50B RCW.

NEW SECTION.  Sec. 37. (1) Sections 8 through 13 of this act (related to industrial insurance) take effect January 1, 2023.

(2) Sections 17 and 28 of this act (related to the department of licensing) take effect March 1, 2023.

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