Washington Business Fall 2016 | Legislative Review | Page 14

2016 legislative review

workers’
compensation
Workers’ compensation continues to be one of
the highest costs for employers in Washington.
While this year saw some bills introduced and
moved, the area of workers’ compensation was
relatively calm. We saw reintroduced bills on
workers’ compensation group self-insurance,
occupational disease claims, workplace injury
reporting, and the retrospective rating plan for
employers. In addition, the Senate included
in its budget the Catastrophic Injured Worker
Pilot Project. This issue was originally covered
in Substitute Senate Bill 5418. The bill would
have required the state Department of Labor
and Industries to create a pilot program where
outside vendors would develop innovative
treatment and service interventions for
catastrophically injured workers. This bill was
about a partnership between the public and
private sector. The bill failed but the budget
proviso ultimately passed. It is these types of
innovative ideas that will make the difference
in whether a business is successful.

Sen. Michael Baumgartner, R-Spokane, and Sen. Sharon Brown, R-Kennewick.

As we approach the 2017 session, it is expected that workers’ compensation will continue to be a major factor in the cost of doing
business in Washington state. With the ever-growing cost of workers’ compensation insurance, AWB will be looking to propose
real reforms to address the growing concerns of all businesses, especially our small businesses.

SB 6321

workers definition
Failed/AWB Supported

Senate Bill 6321, was introduced by Sen.
Michael Baumgartner, R-Spokane. It
addressed certain exclusions from the
definition of a covered worker under
industrial insurance statutes. The bill would
have streamlined the seven-part test for
independent contractors. The seven-part
test allows employers to show that a worker
is not an employee if they meet the seven
criteria. The seven-part test currently is:
1. The individual has been free from
control or direction;
2. The service is outside the usual
course of business for which the
service is performed, or the service is
performed outside all of the places of

12 association of washington business

business of the enterprise for which
the service is performed, or the
individual is responsible, both under
the contract and in fact, for the costs
of the principal place of business
from which the service is performed;
3. The individual is customarily
engaged in an independentlyestablished trade or the individual
has a principal place of business
eligible for a business deduction for
federal income tax purposes other
than that furnished by the employer;
4. The individual is responsible for
filing with the IRS a schedule of
expenses for the type of business
being conducted;
5. The individual has an active and valid
certificate of registration with the
state Department of Revenue, and

any other state agencies as required
for the business and has registered
for and received a state UBI;
6. The individual maintains a separate set
of books or records for the business; and
7. The individual has a valid contractor
registration or an electrician license.
In addressing the seven-part test, a business
would be able to rely on what state agencies
represented when verifying independent
contractor status. The bill would take the
employer out of policing a subcontractor’s
status and instead rely on the agency to
confirm certain requirements. This would
have reduced costs for business without
impacting the intent behind the law. It
passed the Senate on a vote of 29-20.
Unfortunately, labor opposed the bill and
it ultimately failed to move in the House.