In the final part of our discussion on independent contractors, we will look at the last 4 tests of Part B of the Department of Labor and Industries in Washington state.

In our previous 2 discussions, we looked at Part A of the guide and the first half of Part B.  In this discussion we will look at the remaining 4 tests:

1. Is the individual responsible for filing a schedule of expenses that would be part of a business return and is it for the same business activity they were engaged for?  If yes, then the evidence would suggest that this individual is an independent contractor.  If not, you must cover that individual under your worker’s compensation insurance.
2. Does the individual have all of the necessary licenses and registrations to perform their work?  If not, you must cover them under your worker’s compensation.
3. Does the individual maintain their own set of books or bookkeeping that is separate from your own?  Evidence of this would be an invoice, credit memo, or statement of account.  If yes, then the evidence suggests that the individual is an independent contractor.

For general contractors only: Does the individual have their own, valid contractors license?  If not, then you must cover this individual under your own worker’s compensation insurance.

If any of the tests in these three discussions are failed, it is recommended that you contact the Department of Labor & Industries for further advice.  It is incumbent on the business owner to insure that all independent contractors are actually independent contractors and not really employees.  The state of Washington provides substantial penalties for falsely reporting employees as independent contractors to avoid paying worker’s compensation insurance premiums.

https://www.lni.wa.gov/IPUB/101-063-000.pdf