Seattle’s New Independent Contractor Ordinance: Immediate Action Required – Contracts and Commercial Law

Companies with independent contractors in Seattle need to take
immediate action to comply with a new law passed by the Seattle
City Council. The Independent Contractor Protections Ordinance,
codified at SMC 14.34, took effect Sept. 1.

The law applies to solo independent contractors who perform any
part of their work in Seattle for a commercial hiring entity if the
contractor receives or is expected to receive at least $600 in
total compensation from the hiring entity during a calendar year.
If the hiring party knows or has reason to know that the work is
being performed in Seattle, then the law applies, even if the
hiring party has no preference as to where the work is
performed.

Independent contractors are defined to include individuals and
entities consisting of only one person. The law does not apply to
workers being treated as employees by a staffing agency or
consulting firm.

Commercial hiring entities are defined to include for-profit and
nonprofit organizations. Modified rules apply to drivers for
transportation network companies, such as ride-share services.
There are also exceptions for lawyers and for contractors whose
sole relationship to the hiring party is a property rental
agreement.

Commercial hiring entities with independent contractors covered
under the new law must:

• Provide a written precontract disclosure to the contractor that
  includes at least 12 specified categories of information about the
  engagement. This disclosure must be in a single document in the
  contractor’s primary language. A model notice is
  available.




• Provide written updates before making changes to any of the
  required information.




• Provide timely payment consistent with the precontract
  disclosure terms or a later written contract. If no deadline for
  payment is specified, then the contractor must be paid no later
  than 30 days after the work is completed.




• Provide an itemized, written payment disclosure accompanying
  each payment. The disclosure must be in a single document, such as
  a pay stub or invoice, and it must contain information in at least
  12 specified categories.




• Provide a written notice of the contractor’s rights under
  the new law. The notice must be in English and, if applicable, the
  contractor’s primary language. A model notice is
  available.




• Maintain for three years records that demonstrate compliance
  with these requirements.




• Refrain from retaliating against any contractor who asserts
  rights protected under the new law. Prohibited retaliation includes
  threatening to report that the contractor is an illegal immigrant.
  If any adverse action is taken within 90 days of a contractor’s
  exercise of rights, the law creates a rebuttable presumption that
  the action was retaliatory.

The precontract disclosure and disclosure of rights must be
provided before work begins or, for contractors already providing
services, by Sept. 30, 2022.

Penalties for violating this law may include payment of unpaid
compensation, liquidated damages, civil penalties, other penalties
payable to an aggrieved contractor, fines and interest. These
penalties are in addition to any other relief available under any
other law.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.