The Seattle City Council on June 14 passed a bill that requires companies utilizing independent contractors to provide pre-contract written disclosure of contract terms, to make payments within certain timeframes, and to provide similar written disclosures accompanying payments.
The regulation covers independent contractors where the work is conducted in the whole or part of Seattle, when the hiring entity knows or has reason to know the work is taking place in Seattle, and the work being performed is for services in the course of the hiring entity’s business or commercial activity.
The city’s Office of Labor Standards (OLS) and Labor Standards Advisory Commission (LSAC) each have expressed misgivings about the legislation, according to the Seattle City Council Insights, an independent site dedicated to following, reporting on and discussing the activities of the Seattle City Council.
In February 2019, the LSAC was charged with developing a program identifying how it would work with OLS on the issue of misclassification, particularly by providing input on effective strategies based on their experience and existing worker and business associations. It returned with the following recommendation:
LSAC recommends a policy requiring hiring entities to provide independent contractor workers with the information necessary to understand (1) the terms of the relationship between an independent contractor and a hiring entity and (2) what work is covered in each payment received. More simply, independent contractors should be able to understand the terms of their engagement and determine whether those terms have been satisfied.
According to Seattle City Council Insight, the breadth of the bill “goes far beyond” its initial recommendations. The LSAC urged the council to postpone its work on the transparency requirements of IC work arrangements and and prioritize pay standards for gig workers.
The city council passed the bill June 14 on an 8-0 vote. The bill goes into effect Sept. 1, 2022.