Employers' Guide To Workers' Compensation Insurance In Washington State Page 32
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40Appendix C
This information is provided as a quick reference guide. While we make every effort to ensure it is correct,
it is not intended to replace L&I’s or the insured’s policies, procedures, RCWs or WACs in their entirety.
Responsibility for
nature as the contract, or the individual has
a principle place of business eligible for IRS
Independent Contractors
business deduction, and
4. The individual is responsible for filing a
All businesses
schedule of expense and income with the
IRS for the business, and
If you enter into a contract with an independent
contractor, you may be required to provide
5. Has an active account with the Department
workers’ compensation insurance coverage
of Revenue and other state agencies,
during the period of the contract. You must
as required, for the business they are
cover the contractor if he or she is a worker as
conducting under the contract, and an
defined in the workers’ compensation laws. That
active unified business identifier number
definition (see Appendix A) includes workers
(UBI) with the State of Washington, and
“... working under an independent contract, the
6. The individual maintains a separate set
essence of which is his or her personal labor.”
of books and records that reflect items of
income and expense for the business.
Not understanding your requirements can
leave your business vulnerable to unexpected
Additional responsibilities for
premiums, penalties and even lawsuits from
independent contractors and their employees.
construction and electrical contractors
RCW 51.08.195 gives an employer an alternative
If you are a construction or electrical contractor,
six-part test to determine if an independent
you must follow the six-part test above and
contractor is exempt from mandatory workers’
apply a seventh part to determine whether an
compensation coverage and other requirements,
individual is exempt from mandatory coverage.
such as unemployment tax.
(See RCW 51.08.181.)
The six-part test states that a person is exempt if:
7. The individual must have a valid contractor
registration pursuant to Chapter 18.27 RCW
1. He or she is free from control or direction
or an electrical contractor license pursuant
over the performance of the services, and
to Chapter 19.28 RCW.
2. The service provided is outside the usual
course of business or it is performed outside all
of the places of business of the hiring enterprise
or the hired individual is responsible, both
under the contract and in fact, for the costs of
Questions on Independent Contractor status and
the principal place of business from which the
liability for workers’ compensation reporting?
service is performed, and
Contact the Workers’ Compensation Coverage
3. The individual is engaged in an
Determinations Unit at 509-324-2627 or email
independently established trade of the same
Determinations@Lni .wa .gov
28
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