In a growing trend of increasing workplace protections for independent contractors, the Seattle City Council has passed the "Independent Contractor Protections Ordinance," aimed at increasing pay transparency for the ever-growing gig workforce. The ordinance goes into effect Sept. 1, 2022.
Businesses Covered
The ordinance (SMC 14.34) broadly applies to "hiring entities," which generally includes any person or entity that hires an independent contractor.
The city's FAQs describe the law as applying to any hiring entities "regularly engaged in business or commercial activity," including non-profits.
Workers Covered
"Independent contractor" is defined 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."
However, the ordinance excludes:
- Lawyers.
- Workers whose relationship with the hiring entity is limited to a property rental agreement (such as a hair stylist who rents a booth at a salon).
- Any other class of independent contractors that the Director of the Office of Labor Standards excludes through forthcoming rules.
Business Obligations
The ordinance requires covered "hiring entities" to provide independent contractors with certain pre-contract disclosures or "the proposed terms and conditions of work." These include:
- Date.
- Names of parties and contact information of the business.
- Description and location of the work.
- Compensation structure (e.g., pay rate, pay basis, tips/service charge distribution policy, reimbursements, deductions, fees and charges).
- Pay schedule.
At the time of payment, required disclosures include many of the above items, as well as gross payment, specific deductions, and net payment after deductions.
Additionally, hiring entities must provide timely payment as required by the terms of a contract, the terms of the pre-contract disclosure, or within 30 days of contract performance.
Peter H. Nohle and Sherry L. Talton are attorneys with Jackson Lewis in Seattle. © 2021 Jackson Lewis. All rights reserved. Reposted with permission.
An organization run by AI is not a futuristic concept. Such technology is already a part of many workplaces and will continue to shape the labor market and HR. Here's how employers and employees can successfully manage generative AI and other AI-powered systems.
Related Content
HR must always include human intelligence and oversight of AI in decision-making in hiring and firing, a legal expert said at SHRM24. She added that HR can ensure compliance by meeting the strictest AI standards, which will be in Colorado’s upcoming AI law.
The proliferation of artificial intelligence in the workplace, and the ensuing expected increase in productivity and efficiency, could help usher in the four-day workweek, some experts predict.
Learn how Marsh McLennan successfully boosts staff well-being with digital tools, improving productivity and work satisfaction for more than 20,000 employees.