Independent contractors would face possible fines under Senate bill 6575 now in the House Rules Committee.
The bill would cause workers’ compensation and unemployment insurance costs to rise for contractors who hired more than one subcontractor to do work for them. The requirement, in an amendment to the bill, aims to make sure that all contractors working in the state are registered with Labor & Industries.
The added costs would burden already struggling retailers and might make it too expensive for them to remodel, said Tammie Hetrick, Washington Retail Association’s (WRA) vice president of Retail Services.
Hetrick said she is specifically concerned about shopping malls that typically hire independent contractors to help with remodeling jobs. Malls would face fines of $1,000 to $5,000 if they hired more than one contractor to help with a specific job.
Disagreement over the bill has to do with contractors who don’t consider subcontractors to be employees. The bill interprets subcontractors working on the same job as the main contractor to be employees of the company that hired them.
“Our concern with the bill is how it would affect our mall owners, many of whom are general contractors,” Hetrick said. “It allows the Department of Labor and Industries to assume any hired independent contractor is an employee and puts the burden of proof on the general contractor/mall owner to prove someone working for them isn’t an employee. It would allow Labor and Industries to not just fine the company; it would also allow Labor and Industries to issues fines and penalties on the premiums they pay.”
In testimony before the Legislature, opponents of the bill urged the Legislature to take more time to study the idea later this year rather than passing it this month.
WRA will continue working to remove the amendment or for the overall bill to remain in the House and not move to the Senate for concurrence, Hetrick said.
The bill resulted from a task force that studied the problem of independent contractors taking jobs without workers’ compensation insurance. Such situations are part of what has come to be called the “underground economy.”
