Washington Business 2019 Legislative Review & Vote Record | Page 8

2019 legislative review
Cosmetologists and hair stylists gathered in force at the Legislature, with thousands successfully rallying against SB 5326 and other bills that would
have hurt them as independent contractors.
SHB 1395
direct contractor liability
Failed/AWB Opposed
Substitute House Bill 1395, sponsored
by Rep. Mike Pellicciotti, D -Federal
Way, sought to create direct contractor
liability for payment of wages and
benefits. It would allow the Department
of Labor & Industries to enforce against
a general contractor a requirement to pay
unpaid wages owed by a subcontractor.
It also would have allowed a third party
owed payments or contributions by a
subcontractor to bring a civil action
against a general contractor and allowed
an interested party to bring a civil
action against a general contractor or
subcontractor for wages owed, including
against the general contractor for wages
owed by a subcontractor, after 30 days’
notice to the general contractor and
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association of washington business
subcontractor. AWB opposed this bill as
well as the Senate Bill 5565.
noncompetition
agreements
ESHB 1450
noncompetition
agreements
Passed/AWB Neutral
Engrossed Substitute House Bill 1450,
sponsored by Rep. Derek Stanford,
D-Bothell, was introduced in 2019. The
Senate companion bill, sponsored by
Sen. Marko Liias, D -Lynnwood, was
Engrossed Substitute Senate Bill 5478.
These bills were the result of months
of negotiations between business
and labor. The final bill that passed
m a ke s n o n c o m p e t i t i o n a g re e m e n t s
u n e n f o rc e a b l e u n l e s s a n e m p l oye e
earns more than $100,000 per year.
Earlier versions of the bill had the
salary threshold at over $180,000. For
independent contractors, the salary
threshold is $250,000. The law creates
a presumption that any agreement that
is over 18 months is unreasonable and
unenforceable. While AWB was neutral
regarding the final bill, AWB continues to
have concern with the judicial discretion
language in section 9 of the bill. That
language states in part that if any portion
of the agreement is found invalid, even
if the agreement is ultimately enforced
against the former employee, the law
requires penalties to be issued against
the employer who prevailed. This sets
up the possibility of employers choosing
to not enforce a valid agreement for fear
of unreasonable penalties.