Measure Could Allow L&I to Shut Down Operations for Minor Infractions

The Department of Labor and Industries could shut down a jobsite or even a contractors entire operations for employee classification errors should bills HB1554/SB5613 be passed by the Legislature.

Rick Slunaker AGCs chief lobbyist testified in strong opposition to the bill before the Senate Committee on Labor and Commerce & Consumer Protection. This legislation needlessly takes a sledgehammer approach Slunaker said. L&I could shut down a firms entire operations over a classification error made in good faith. Employers should provide industrial insurance for workers and there are already clear laws on the books about that. This legislation however creates a gray area. It does not provide clear guidance and operations could be shut down over the nuances of whether an employee should be classified as a laborer or a carpenter.

Slunaker suggested it would be better if the legislation simply said that without the required coverage you could be subject to a stop work order.

In addition Slunaker noted that the bill provides contractors no means for recourse should a shut down by L&I be found to be without merit. A jobsite could be shut down because of a suspicion of a misclassification but if no misclassification actually occurred there is no mitigation for the contractor only lost time money and reputation he said.

Supporters have suggested that the bill grew out of a recommendation by the Joint Legislative Task Force on the Underground Economy. This is false. Slunaker said it has not recommended such action; rather the task force suggested that the stop work issue be studied further.

The House bill (HB1554) is in the Commerce and Labor Committee and is sponsored by Reps. Conway Chase Dickerson Green Goodman Rolfes Morrell Cody Simpson Campbell Ormsby Van De Wege Appleton Flannigan Seaquist Miloscia Hunt Blake Williams Hudgins Kenney Priest Sullivan Eddy White Hasegawa and Wood.

The Senate version (SB5613) is in the Committee on Commerce Labor and Consumer Protection and is sponsored by Sens. Kohl-Welles Keiser Franklin Kline McDermott Tom and Fraser

Contact Rick Slunaker at 360-352-5000 with questions or comments.

Copies of the bills and summaries can be viewed via the Washington State Legislature Bill Information website.