On June 14, 2021, Seattle City Council passed SMC 14.34, the Independent Contractor Protections (ICP) Ordinance. This ordinance requires covered hiring entities to provide independent contractors with disclosures prior to entering a contract and at the time of payment. In addition, hiring entities must provide timely payment under the terms of a contract, the terms of the pre-contract disclosure, or within 30 days of contract performance. The ordinance goes into effect on September 1, 2022.
The ordinance requires commercial hiring entities to provide self-employed independent contractors with:
Who is Covered?
Self-employed independent contractors who:
Source: City of Seattle Office of Labor Standards
Washington businesses and individuals who hire employees and independent contractors should be aware of the following notable change to Washington law and take the following recommended actions.
Effective June 9, 2022, employers may not include a provision in any contract with an employee or independent contractor that prohibits the employee or independent contractor from disclosing or discussing conduct, or the existence of any settlement involving conduct, that the employee or independent contractor reasonably believed under Washington state, federal, or common law to be illegal discrimination, illegal harassment, illegal retaliation, a wage and hour violation, or sexual assault, or that is recognized as against a clear mandate of public policy. Prohibited non-disclosure and non-disparagement provisions include those contained in employment agreements, independent contractor agreements, agreements to pay compensation in exchange for the release of a legal claim, or any other agreement between an employer and an employee.
It is a violation of the new law for an employer to seek to enforce such a provision, for an employer to request or require an employee enter into such a provision, and for an employer to discharge, discriminate, or retaliate against an employee for disclosing or discussing conduct that the employee reasonably believes to be illegal conduct.
An employer who violates this section after June 9, 2022, can be held liable in a civil cause of action for actual or statutory damages of $10,000, whichever is more, as well as reasonable attorneys' fees and costs.
Action Items: Update Employee Handbooks ASAP and issue notice to independent contractors with this or similar language:
"The Company does not restrict or prohibit employees or independent contractors from disclosing or discussing conduct, or the existence of any settlement involving conduct, that the employee or independent contractor reasonably believes under Washington state, federal, or common law to be illegal discrimination, illegal harassment, illegal retaliation, a wage and hour violation, or sexual assault, or that is recognized as against a clear mandate of public policy. This includes such conduct that occurs at the workplace, at work-related events coordinated by or through Company, between employees, or between Company and an employee, whether on or off the employment premises."
Action Item: Update templates for Offer Letters, Employment Agreements, Non-Disclosure Agreements, Independent Contractor Agreements, Employee Separation and Release Agreements, and Employee Resignation Agreements to ensure compliance.
Contact Mark D. Walters
Article I, Section 8: