Independent Contractor Ordinance Expands Protections for Contractors in Seattle

As a reminder to firms with impartial contractors performing work in Seattle, town’s Unbiased Contractor Protections Ordinance, SMC 14.34, which expands protections for impartial contractors, went into impact on September 1, 2022.

The ordinance applies to all hiring entities and covers any impartial contractor who performs work, in entire or partly, in Seattle. Importantly, the ordinance requires firms to ship the next info to such contractors: pre-work written disclosures, a discover of rights, in addition to compensation itemization disclosures every time a contractor is paid. The ordinance additionally imposes new penalties for premature contractor funds.

Pre-Work Disclosures

First, the ordinance requires a hiring entity to supply sure written disclosures to impartial contractors previous to the contractor performing work. These disclosures are supposed to summarize the scope of labor for which the contractor has been employed, together with the next info:

• date of the disclosure;
• names of the events;
• contact info for the hiring entity (together with bodily tackle, mailing tackle, phone quantity, and electronic mail tackle, as relevant);
• description of labor;
• location(s) of labor and common place of job of the impartial contractor or hiring entity;
• fee(s) of pay and any variable/incentive compensation phrases;
• pay foundation (hour, day, piece fee, and many others.);
• tip/service cost distribution coverage, if relevant
• typical bills that may be incurred by the impartial contractor, specifying which, if any, are reimbursed by the hiring entity;
• any deductions, charges, or prices the hiring entity might subtract from fee to the impartial contractor, and the insurance policies for every kind of deduction; and
• fee schedule.

These disclosures necessities could be happy by together with the required info in an impartial contractor, consulting, or different comparable settlement, as long as the settlement is executed previous to the graduation of providers. In any other case, a hiring entity can use the mannequin disclosure issued by the Metropolis of Seattle.

Contractors who had already begun performing work earlier than September 1, 2022, should obtain these written disclosures no later than September 30, 2022, if that they had not beforehand obtained them.

Discover of Rights

Second, the hiring entity is required to supply every impartial contractor with a discover of the rights established by the ordinance. Just like the pre-work disclosures, contractors employed on or after September 1, 2022, ought to obtain this discover previous to starting work, and contractors who begun offering providers earlier than that date should obtain this discover on their subsequent pay date, however in no occasion later than September 30, 2022.

Well timed Cost and Cost Itemization Disclosures

Third, the ordinance requires a hiring entity to supply well timed compensation for work carried out, both as supplied beneath the phrases of the contract or, if the fee phrases aren’t specified within the contract, no later than 30 days after completion of the work.

On the time of every fee, the hiring entity should embody a written disclosure with itemized fee info, together with the next:

• date;
• names of the events;
• description of providers lined by the fee;
• location(s) of providers lined by the fee;
• fee(s) of pay and any variable/incentive compensation phrases relevant to the work lined by the fee;
• pay foundation (hour, day, piece fee, and many others.) with accounting of methodology(s) for figuring out fee earned in the course of the pay interval;
• tip compensation and/or service cost distributions, if relevant;
• bills reimbursed, if relevant;
• gross fee;
• deductions, charges, or different prices, if relevant; and
• web fee after deductions, charges, or different prices.

Hiring entities can present these disclosures in a type of their selecting, together with the mannequin itemization kind issued by the Metropolis of Seattle.

Violations

A hiring entity that violates the ordinance shall be accountable for full fee of any unpaid compensation with curiosity and could also be topic to civil penalties and fines. The Workplace of Labor Requirements has authority to manage and implement the ordinance and can promulgate administrative guidelines and create mannequin disclosures and notices by September 1, 2022.

Subsequent Steps

Firms that have interaction impartial contractors to carry out providers within the Metropolis of Seattle ought to work with counsel to replace their normal agreements to incorporate the entire required informational disclosures, develop compliant fee itemization types, and make sure the well timed supply of notices of rights and informational disclosures to all current and future impartial contractors.

For extra info on the brand new legislation and associated issues, please contact Jason Storck, Joseph Horne, Rachel Herrington, or one other legal professional in Wilson Sonsini’s employment litigation observe.