Seattle creates new requirements for businesses hiring independent contractors

By: Editorial Staff Posted: 06/14/2021

This legislation will impact the broad business community

On June 14, the Seattle City Council unanimously passed Council Bill 120069, a bill that creates new disclosure and documentation requirements for any business hiring an independent contractor to do work in Seattle.

This legislation will impact the broad business community because it defines an independent contractor as a person or entity composed of no more than one person, regardless of corporate form or method of organizing the person’s business, that is hired by a hiring entity as a self-employed person or entity to provide services in exchange for compensation. This definition includes app-based workers, but goes well beyond them, so that businesses hiring a one-person business for jobs like electrical work, plumbing, coding, accounting, or copywriting, would also be subject to these disclosure and documentation requirements.

While Councilmembers have discussed this legislation as a way to increase protections for vulnerable workers, it is written so generally that the new disclosure and documentation requirements will impact far more workers and businesses than originally intended. Recognizing the sweeping scope of this legislation, the Finance and Housing Committee passed an amended version exempting hair stylists and giving Seattle’s Office of Labor Standards (OLS) the ability to determine which independent contractors are exempt because they have adequate bargaining power.

The Seattle Metro Chamber weighed in during Council’s policymaking process by submitting public testimony and written comments urging Council to do the necessary stakeholder outreach and to address harmful consequences the bill could create – including making sole proprietorships in Seattle less competitive than larger companies for contract work. The Chamber will continue to represent the perspective of the broad business community and keep members informed as this legislation goes through the rulemaking process. This rulemaking process will be especially important because the Office of Labor Standards will make many of the decisions about which industries will be subject to the bill.

Before the June 14 vote, the Seattle Metropolitan Chamber of Commerce sent in letter urging Council to address the complex nuances of the legislation, rather than leaving it open for interpretation during the rulemaking process. You can read that letter here.