Independent Contractor Employment in Washington State

The Department of Commerce was charged by the Washington State Legislature per Substitute Senate Bill 6032  to produce a study on independent contractor employment in Washington State by June 2019. 

The study included the following information: (a) needs of workers earning income as independent contractors including sources of income, (b) amount of their income derived from independent work, (c) discussion of the benefits provided to such workers.

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What is independent contract work?

According to the Bureau of Labor Statistics (BLS), independent contract work is consultant or freelance-based and is a non-traditional or “alternative” form of employment. Examples can include, but are not limited to, real estate agents, family child care providers, and architects.

Independent contractors work for themselves or through a business, such as a sole proprietorship or limited liability company (LLC). They have the right to control and direct their work, including but not limited to hiring labor and setting their own work schedules.

What do we know about independent contract work?

Nationally, the majority of workers report earning income from wages as employees.  As of May 2017, 6.9 percent of the nation’s workforce reported their main source of income came from independent contracting.

There are also workers who earn income from both wages and independent contract work. There is little information about workers who supplement their income through independent contract work.

Independent contract work occurs across industries and occupational groups, including individuals who engage in work through online labor platforms, or “gig” work. In September 2018, BLS reported on new data that found independent contractors are more likely than other alternative employment arrangements to have performed work through mobile applications or websites.

Alternative arrangements are defined by BLS to include independent contractors, on-call workers, temporary help agency workers, and workers provided by contract firms. Independent contractors are the largest group of people in alternative arrangements at 58 percent.

What is the expected outcome of the study?

The study will produce conservative estimates about independent contract work performed in the state by identifying and procuring needed data and expertise. In addition, Commerce will convene an advisory committee to assist in the development of the study.  The study will not include policy recommendations, nor create new definitions relating to worker classification.

Advisory committee meeting materials and recordings will be made available to the public online.