What Employers Need to Know about Seattle's New Independent Contractors Protections Ordinance
Related Practice: Employment
On September 1, 2022, Seattle’s Independent Contractor Protections Ordinance went into effect. The Seattle City Council passed SMC 14.34 et seq. on June 14, 2021. The Ordinance creates protections for the increasing numbers of independent contractors in Washington, targeting issues such as non-payment or late payment for work, lack of information about the terms and conditions of work, and misclassification. Ordinance 126373 at 1.
What Does the Ordinance Require?
Qualifying employers must provide independent contractors with the following:
- A notice of rights under the Ordinance before the independent contractor begins work;
- A pre-work written notice identifying the proposed terms and conditions of work and the terms and conditions of payment before starting work;
- Timely payment in accordance with the terms and conditions of the pre-work written notice;
- Unless different payment terms are specified in writing, payment within 30 days after the completion of services; and
- A written notice that gives specific itemized payment information each time payment is made.
The Ordinance does not require any specific terms or conditions for the pre-work written notice or contract, except the 30-day gap filler in the event that timing for payment is not specified.
Which Employers Are Covered?
The Ordinance covers “commercial hiring entities,” which are defined as “hiring entit[ies] regularly engaged in business or commercial activity.” The definition does not include “third parties purchasing services from hiring entities that hire platform gig workers to provide prearranged services.”
Practically speaking, this means that businesses that hire independent contractors to perform work in Seattle are covered by the Ordinance, but businesses working with gig platforms that themselves hire independent contractors do not need to meet these requirements for those independent contractors. For example, a restaurant using a platform with a delivery service that utilizes independent contractors to execute deliveries does not need to meet these requirements for those workers.
Which Independent Contractors Are Entitled to these Protections?
Independent contractors are covered by the Ordinance if they are self-employed independent contractors who:
- Have no employees;
- Perform any part of their work in Seattle for a commercial hiring entity; and
- Will receive or may reasonably expect to receive at least $600 in total compensation from the hiring entity between January 1 and December 31 in a given year.
The Ordinance only covers individuals hired as independent contractors, whether they are hired as a self-employed person or an entity composed of no more than a single person, regardless of any corporate form or the use of a trade name. If the independent contractor is an entity with employees, the entity is not covered by the Ordinance.
Next Steps for Seattle Employers
- Hiring entities that have an independent contractor already working for them as of September 1, 2022 must provide the notice of rights and pre-work written notice to the independent contractor by September 30, 2022, or by the date of compensation, whichever is sooner.
- Hiring entities that hire an independent contractor on or after September 1, 2022 must provide the required notices before the independent contractor begins work for the hiring entity.
Resources and sample documents are available from the Seattle Office of Labor Standards here. Hiring entities may contact OLS to request translations of model notices and for assistance with compliance.
