S-4631.1

SUBSTITUTE SENATE BILL 6302

BySenate Labor & Commerce (originally sponsored by Senators Conway, Saldaña, Hasegawa, Orwall, and Valdez)

AN ACT Relating to misclassification in the finishing trades on public works projects; amending RCW 39.12.100, 51.08.185, and 51.08.181; and adding a new section to chapter 39.12 RCW.

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

NEW SECTION.  Sec. 1. A new section is added to chapter 39.12 RCW to read as follows:

(1) No contractor or subcontractor may engage more than two independent contractors, as described in RCW 39.12.100, to perform the same type of covered finishing work at the same time on a public works project.

(2) If a contractor or subcontractor violates subsection (1) of this section, all individuals engaged by the contractor or subcontractor to perform the same type of covered finishing work at the same time is a worker, laborer, or mechanic for the purposes of this chapter and an employee for the purposes of Title 51 RCW.

(3) For the purposes of this section, "covered finishing work" means work in drywall, flooring, tiling, painting, and glazier and glasswork.

Sec. 2. RCW 39.12.100 and 2023 c 88 s 6 are each amended to read as follows:

(1) For the purposes of this chapter, an individual employed on a public works project is not considered to be a laborer, worker, or mechanic when:

(((1)))(a) The individual has been and is free from control or direction over the performance of the service, both under the contract of service and in fact;

(((2)))(b) The service is either outside the usual course of business for the contractor or contractors for whom the individual performs services, or the service is performed outside all of the places of business of the enterprise for which the individual performs services, or the individual is responsible, both under the contract and in fact, for the costs of the principal place of business from which the service is performed;

(((3)))(c) The individual is customarily engaged in an independently established trade, occupation, profession, or business, of the same nature as that involved in the contract of service, or the individual has a principal place of business for the business the individual is conducting that is eligible for a business deduction for federal income tax purposes other than that furnished by the employer for which the business has contracted to furnish services;

(((4)))(d) On the effective date of the contract of service, the individual is responsible for filing at the next applicable filing period, both under the contract of service and in fact, a schedule of expenses with the internal revenue service for the type of business the individual is conducting;

(((5)))(e) On the effective date of the contract of service, or within a reasonable period after the effective date of the contract of service, the individual has an active and valid certificate of registration with the department of revenue, and an active and valid account with any other state agencies as required by the particular case, for the business the individual is conducting for the payment of all state taxes normally paid by employers and businesses and has registered for and received a unified business identifier number from the state of Washington;

(((6)))(f) On the effective date of the contract of service, the individual is maintaining a separate set of books or records that reflect all items of income and expenses of the business which the individual is conducting; and

(((7)))(g) On the effective date of the contract of service, if the nature of the work performed requires registration under chapter 18.27 RCW or licensure under chapter 18.106, 19.28, or 70.87 RCW, the individual has the contractor registration and contractor licenses required by the laws of this state including chapters 18.27, 18.106, 19.28, and 70.87 RCW.

Sec. 3. RCW 51.08.185 and 1977 ex.s. c 350 s 16 are each amended to read as follows:

(1) "Employee" shall have the same meaning as "worker" when the context would so indicate, and shall include all officers of the state, state agencies, counties, municipal corporations, or other public corporations, or political subdivisions.

Sec. 4. RCW 51.08.181 and 2023 c 88 s 9 are each amended to read as follows:

(1) For the purposes of this title, any individual performing services that require registration under chapter 18.27 RCW or licensing under chapter 18.106 or 19.28 RCW for remuneration under an independent contract is not a worker when:

(((1)))(a) The individual has been, and will continue to be, free from control or direction over the performance of the service, both under the contract of service and in fact;

(((2)))(b) The service is either outside the usual course of business for which the service is performed, or the service is performed outside all of the places of business of the enterprise for which the service is performed, or the individual is responsible, both under the contract and in fact, for the costs of the principal place of business from which the service is performed;

(((3)))(c) The individual is customarily engaged in an independently established trade, occupation, profession, or business, of the same nature as that involved in the contract of service, or the individual has a principal place of business for the business the individual is conducting that is eligible for a business deduction for federal income tax purposes other than that furnished by the employer for which the business has contracted to furnish services;

(((4)))(d) On the effective date of the contract of service, the individual is responsible for filing at the next applicable filing period, both under the contract of service and in fact, a schedule of expenses with the internal revenue service for the type of business the individual is conducting;

(((5)))(e) On the effective date of the contract of service, or within a reasonable period after the effective date of the contract, the individual has an active and valid certificate of registration with the department of revenue, and an active and valid account with any other state agencies as required by the particular case, for the business the individual is conducting for the payment of all state taxes normally paid by employers and businesses and has registered for and received a unified business identifier number from the state of Washington;

(((6)))(f) On the effective date of the contract of service, the individual is maintaining a separate set of books or records that reflect all items of income and expenses of the business which the individual is conducting; and

(((7)))(g) On the effective date of the contract of service, the individual has a valid contractor registration pursuant to chapter 18.27 RCW, a plumbing contractor license pursuant to chapter 18.106 RCW, or an electrical contractor license pursuant to chapter 19.28 RCW.

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