A Washington independent contractor agreement is a document that outlines an agreement between a contractor and a client. It states that the contractor will provide services to the client without being classified as an employee.
- Worker Classification: ABC Test
- Tax Structure: No State Income Tax
- Definition: RCW 51.08.195
- At-Will Employment: Yes
Independent Contractor Definition
An independent contractor is a worker who exercises more freedom over the work they complete than a standard employee. The client who hires them often recruits them for a specialized skill or service, and the client doesn’t have to provide resources like health insurance as they would to a standard employee.
In Washington, independent contractors are workers who satisfy all three prongs of the ABC test. Employees are all workers who haven’t satisfied one or more of the three prongs of the ABC test.
Worker Classification Test
Washington uses the ABC test to determine the legal classification of a worker.
Washington utilizes all three prongs of the test. If you can prove a worker meets each ABC test prong, Washington will classify them as an independent contractor. The three prongs are as follows:
- Prong A: The worker is free from the company’s direction and control in their service performance, both in fact and under contract.
- Prong B: The worker’s service is outside the company’s usual course of business, or they perform their service outside the business’s premises.
- Prong C: The worker is normally engaged in their independently established business, which is the same as their service to the company.
Note that Washington has slightly different classification guidelines for independent contractors in the electrical and construction industries. [1]
Rights and Responsibilities
One reason employers in Washington prefer to hire independent contractors is their lack of employment rights compared to typical employees. Washington law considers any worker an employee until proven otherwise.
Independent contractors in Washington typically lack the following rights:
- Overtime pay rights
- Worker’s compensation rights
- Minimum wage rights
State Taxes
Washington does not have a state income tax. However, independent contractors should be aware of the federal self-employment tax rate of 15.3% on earnings of $400 or more. [2]
Filing for Unemployment
Washington uses the ABC test to determine unemployment benefits for its workers. If a worker satisfies Prongs A, B, and C, Washington will classify them as an independent contractor. Independent contractors are ineligible for unemployment benefits in Washington state.
Sample
View a Washington independent contractor agreement template and download it as a PDF or Word file below:
