Nontraditional Worker Study, Report to the Legislature — Washington State Department of Commerce
Summary
The Nontraditional Worker Study, a report to the Legislature by the Washington State Department of Commerce dated Jan. 1, 2021, prepared under SB 6168 Section 127(74). That budget proviso provided $80,000 of the general fund for fiscal year 2021 for research on nontraditional workers, to recommend policies and practices for the state's worker and small business programs. The report says nontraditional workers often have work arrangements that lack streamlined access to social safety benefits, or no access at all. Its key findings include that state agencies face technical and philosophical challenges in serving these workers and that some communities distrust government and can perceive agencies' compliance measures as punitive. Its recommendation is to create and fund an interagency workgroup on independent workers.
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Cite this document
“Nontraditional Worker Study, Report to the Legislature — Washington State Department of Commerce.”
Original at app.leg.wa.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2021-nontraditional-workers-report-125aab13-4243-4307-af7c-baa3e5c5ac60/
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Nontraditional Worker
Study
A Report pursuant to SB 6168 Section 127(74)
Jan. 1, 2021
RESEARCH SERVICES, LOCAL
GOVERNMENT DIVISION REPORT TO THE LEGISLATURE
Lisa Brown, Director
2.3
Acknowledgments
Washington State Department of Commerce Sector-Specific Interviews
Local Government Division: Tracy Schreiber, Keep Washington Working Workgroup
Jordan Laramie, Alice Zillah
Whipsmart and Washington Filmworks
Agency Roundtables and Consultation
Department of Commerce: JB Bennis, Community Shellea Allen, SAG-AFTRA Seattle Local (former);
Engagement and Outreach Specialist; Tammy Ben Cabildo, AHANA; Manny Cawaling, Inspire
Deets, Commerce Specialist, Office of Economic Washington; Davin Diaz, Arts Center Task Force,
Development & Competitiveness; Robb Zerr, DrewBoy Creative; Ginger Ewing, Terrain; Tony
Managing Director Rural, Small Business and Fulgham, All is Well Studios; Ayn Gailey, self-
Marketing Services employed; Hollie Huthman, The Shakedown,
Bellingham City Council member; Jamie Lee,
Department of Revenue: Dean Carlson, Senior Tax Seattle Chinatown International District
Policy Coordinator; Sarah Del Moral, Tax Policy Preservation and Development Authority; Lauren
Researcher; John Wack, Tax Policy Specialist Lee Walker, Tacoma House; Michael Liang,
Spaceworks; Carlos Moreno, Hispanic Metropolitan
Department of Children Youth and Families: Jason Chamber; Nate Omdal, American Federation of
Ramynke, Child Care Subsidy Program Musicians, Local 76-493; Melissa Purcell, IATSE
Local 488 Studio Mechanics of the Pacific
Department of Social and Health Services: Louisa Northwest; Charlie Robin, Capitol Theatre Yakima;
Erickson, Workforce Development Program and Maria Sigüenza, The Washington State
Policy Administrator; Eric Peterson, Deputy Chief, Commission on Hispanic Affairs; Rich Stolz,
Office of Program & Policy OneAmerica
Department of Labor and Industries: Chris Bowe,
Assistant Director, Fraud Prevention and Labor
Standards
Employment Security Department: Scott Michael,
Legal Services Coordination Manager, Employment Washington State Department of Commerce
System Policy; Larry Sheahan, Unemployment Tracy Schreiber,
Insurance Policy Manager tracy.schreiber@commerce.wa.gov
Health Care Authority: James Brackett, Medicaid RESEARCH SERVICES, LOCAL GOVERNMENT
Eligibility Program Manager, Division of Medicaid DIVISION
Eligibility and Community Support; Mia Nafziger, 1011 Plum St. SE
Medical Program Specialist; Ariel Pyrtek, Medical P.O. Box 42525
Program Specialist; Suzanne Swadener, Senior Olympia, WA 98504-2525
Health Policy Analyst, Policy
www.commerce.wa.gov
Workforce Education and Training Board: Dave
Wallace, Research Director; Eric Wolf, Deputy For people with disabilities, this report is available
Executive Director – Policy and Programs on request in other formats. To submit a request,
please call 360.725.4000 (TTY 360.586.0772)
NONTRADITIONAL WORKER STUDY
Table of Contents
Executive Summary ..................................................................................................................................... 2
Introduction ................................................................................................................................................. 4
Services and Benefits for Nontraditional Workers ......................................................................................... 6
Key Findings .............................................................................................................................................. 15
Recommendation ...................................................................................................................................... 26
Appendix A: State and Federal Definitions by Worker Classification ............................................................ 27
Appendix B: Summary of Agency Contractors’ Tests .................................................................................. 35
Appendix C: Data Collection Processes ...................................................................................................... 40
NONTRADITIONAL WORKER STUDY 1
Executive Summary
Authorizing Legislation
In 2020, the legislature passed SB 6168 Section 127(74) which included a budget proviso as follows:
(74) $80,000 of the general fund—state appropriation for fiscal year 2021 is provided solely for the department to
facilitate research on nontraditional workers across the regulatory continuum, including convening cross-agency
partners. The purpose of the research is to recommend policies and practices regarding the state's worker and small
business programs, address changes in the labor market, and continue work initiated by the independent contractor
employment study funded in section 127(47), chapter 299, Laws of 2018. The department must submit a report of its
findings to the governor by November 1, 2020.
Overview
Nontraditional workers are a broad and diverse group. Often, these workers have complex and varied work
arrangements that lack streamlined access to social safety benefits, or in some cases, no access at all. State
and federal social safety net systems were not developed to support these workforce arrangements, and it is
difficult to determine the best remedy for benefit shortfalls. Regulations and requirements, such as those for
the tax code, are designed for typical employer-employee relationships — those of wage and salary earners in
steady long-term employment as described in Figure 1. Data collection for nontraditional working relationships
varies across agencies, is often incomplete, or is not universally applicable to the myriad of employment
scenarios for nontraditional workers.
This report considers Washington's current legal and statutory framework for accessing benefits by work
arrangement. The report looks at ways nontraditional workers can access state and federal services, the
services and benefits available to nontraditional workers, and efficiencies and gaps in these systems.
Traditional work arrangements are categorized by their ability to access benefits, state services, and labor
protections that are robust across all state and federal agency benefit platforms. Nontraditional work
arrangements defined within this report are categorized by their relative limitations and restrictions from
accessing benefits, state services, and labor protections.
Key Findings
State agencies experience multi-layered challenges interacting with nontraditional workers.
Agencies face both technical and philosophical challenges in serving nontraditional workers. Agencies face an
external perception challenge when their compliance role interferes with community outreach. Members of
some communities inherently distrust the government and can perceive agencies' compliance measures as
punitive.
Occupational and industry realities create challenges in government systems for both the worker and the
employer.
Capacity, in relation particularly to knowledge, finances, and time, is a notable constraint of both workers and
employers. A worker's income, and the strength of their community network, affects whether they can access
technical assistance to comply with state and federal requirements. Certain industries and occupations are
NONTRADITIONAL WORKER STUDY 2
primarily project based, putting workers at a financial disadvantage because of lack of access to steady or
long-term employment.
Communication and community partnerships can be inconsistent across cultural and geographical
communities, which creates challenges in building relationships, trust, and access.
Some of Washington’s diverse cultural communities and geographies have distinct disadvantages interacting
with government agencies. Immigration status, in particular, creates barriers to some state agency programs.
Communities lack information from trusted or known sources, whether that is within a cultural community or
an occupational or industry community. In some communities, there is noted inaccessibility in language
interpretation, digital literacy, and broadband service, which inhibits outreach methods and delivery of benefits.
The pandemic exacerbated existing conditions, including inconsistent access to broadband, disparities in
technical fluency, and underfunded or understaffed outreach efforts.
Policy changes implemented in response to the pandemic enabled state agencies to successfully shift
services and, in some cases, reach more Washingtonians. Agencies also found digital efficiencies
administering some services. However, being able to continue certain services without additional emergency-
related flexibility and funding will be challenging. While all state agencies desire an equitable and resilient
recovery, the pandemic highlighted demographic, age, and occupational discrepancies inherent within the
state's platforms delivering benefits. The current capacity of state systems makes it difficult for Washington's
diverse nontraditional worker population to have equal access to relief and rebuilding opportunities.
Recommendation
Create and fund an interagency workgroup on independent workers.
Nontraditional work is here to stay and is likely increasing.1 Labor force characteristics are complex, unequal,
and rapidly changing, signifying that benefits, access and other labor protections need to be evaluated,
prioritizing equity for the 21st century workforce.2 The current narrative of work and labor needs to adapt to
evolving business employment strategies and work arrangements.3
1 Department of Commerce, :2019 Independent Contractor Study," (2019), https://www.commerce.wa.gov/about-us/research-
services/independent-contractor-employment-in-washington-state/
2 Krueger, Alan, "Independent Workers: What Role for Public Policy," (December 2017), https://doi.org/10.1177/0002716217741109
3 National Academies of Sciences, Engineering, and Medicine, "Measuring Alternative Work Arrangements for Research and Policy,"
(2020), https://doi.org/10.17226/25822
NONTRADITIONAL WORKER STUDY 3
Introduction
This report considers Washington's current legal and statutory framework for accessing benefits by work
arrangement. The report looks at ways nontraditional workers can access state and federal services, the
services and benefits available to nontraditional workers, and efficiencies and gaps in these systems.
Workforce arrangements are complex because of legal and statutory frameworks. Because nontraditional
work arrangements often are not full-time, year-long employment, workers face specific challenges accessing
the full range of social safety net benefits the state offers. Themes and policy and program recommendations
were developed through analysis of previous work published by the Department of Commerce in 2019.
Consultation with state agency representatives focused on the challenges and opportunities for nontraditional
workers. The report highlights an analysis of qualitative research with two distinct groups in Washington: the
creative sector and immigrant communities.
The COVID-19 global pandemic is negatively affecting nontraditional workers. The creative sector was one of
the first industries to shut down, and it has still not reopened across the state. Immigrants are
disproportionately impacted by the pandemic, working in industries more susceptible to higher rates of
disease or economic closures and who, as a group, have increasing barriers to health insurance.4 Without
established relationships or state agencies understanding industry-specific challenges, it is difficult for certain
groups to bounce back. The full impacts and implications of the COVID-19 pandemic on Washington's
workforce have yet to be realized.5 The pandemic could increase the number of people participating and
depending on nontraditional work.6
2019 Independent Contractor Study
In 2018, the Washington Legislature directed Commerce to provide information about independent contractor
employment in the state.7 The resulting report, The 2019 Independent Contractor Study, presented research
findings about the needs of workers who earn income as independent contractors.8 It included information
about independent contractor sources of income, work arrangements, business expenses, and access to
benefits and health insurance coverage. The study presented conservative estimates about independent
contractor employment in Washington. These estimates were based on a custom analysis of existing federal
household surveys and aggregated state tax records.
A key finding of the report is that both federal and state data systems do not sufficiently capture data about
independent contractors. Tax records, in particular, can give researchers a pathway to understand this group,
but data-sharing and privacy agreements limit this approach. One of the only ways to identify workers in
nontraditional workforce arrangements within the state's administrative data is by looking at the tax returns
that are associated with nontraditional work and illustrate the relationship of the worker with their payer or
employer, such as through paystubs, W-2s, 1099-MISCs, 1040-SRs, and 1040-C returns. The type of tax
4 Capps, Randy, Batalova, Jeanne, Gelatt, Julia, Migration Policy Institute, "COVID-19 and Unemployment: Assessing the Early Fallout for
Immigrants and Other U.S. Workers," (June 2020), https://www.migrationpolicy.org/research/covid-19-unemployment-immigrants-
other-us-workers
5 Roberts, Paul, The Seattle Times, "It could take years for Washington state's economy to rebound from coronavirus crash," (May
2020), https://www.seattletimes.com/business/economy/no-more-v-shaped-recovery-economists-expect-washington-could-take-
years-to-get-over-the-coronavirus-crash/
6 Berliner, NPR, "Jobs In The Pandemic: More Are Freeland And May Stay That Way," (September 2020),
https://www.npr.org/2020/09/16/912744566/jobs-in-the-pandemic-more-are-freelance-and-may-stay-that-way-forever
7 Substitute Senate Bill 6032, Section 127 (47 (a-b)), (2018), http://leap.leg.wa.gov/leap/budget/lbns/2018Omni6032-S.SL.pdf
8 Department of Commerce, "Independent Contractor Study," (2019), https://www.commerce.wa.gov/wp-
content/uploads/2019/07/Leg-Report-Independent-Contractor-Study-2019.pdf
NONTRADITIONAL WORKER STUDY 4
document also shows if an individual pays all state and federal taxes themselves or if the employer partially
pays state and federal taxes. For more information on state agency use of tax return data and data collection
limitations, see Appendix C: Data Collection Processes.
Federal data is often compiled through survey data. Current survey definitions do not reflect the changing
nature of work arrangements in the labor market, and efforts are underway to capture more information about
nontraditional sources of work in survey questionnaires. Additionally, many workers do not correctly self
identify their employment arrangement in surveys because of confusion about the category.
Additionally, the 2019 Independent Contractor Study found: 9
9.1% (320,020) of Washington’s workforce primarily earn their income as independent contractors.
Independent contracting is more prevalent and growing faster in Washington compared with the country as
a whole.
Sectors with the highest proportion of independent contractors in Washington are:
professional, scientific and technical services
real estate and rental leasing
retail trade and other services
Sectors experiencing the most growth of independent contracting arrangements are:
transportation and warehousing
educational services
accommodation and food services
Methodology
Research for this report was primarily conducted from July 2020 through September 2020. Time and budget
were major factors that defined the research approach of state agency consultation and individual one-time
interviews. This report focused on the legal and statutory state and federal framework in place to determine
access to social safety nets for nontraditional workers. Our approach included:
Agency Roundtables
Two state agency roundtables were held to learn more about specific challenges and opportunities agencies
experience in serving nontraditional workers and specific responses or adjustments resulting from the COVID-
19 pandemic to differently serve or address the needs of nontraditional workers.
Sector-specific Interviews
Sixteen interviews were conducted with people identified as working in organizations that serve the creative
sector or in community-based organizations that work with the immigrant communities. This report also
supplemented direct qualitative research with media sources and literature reviews.
This report uses the term "creative sector" as a broad term for a section of the economy in which workers add
value to society in one or more ways through the provision of goods and/or services. The term "immigrant
9 Point-in-time estimates calculated by MEF Associates based on self-reported survey responses to the Contingent Worker Survey
(CWS) published by the Bureau of Labor Statistics for May 2017 include respondents who reported performing online work. Estimates
are at a 90% confidence interval, meaning the error is quantified as either plus or minus 33,019 workers. The certainty of the estimates
are impacted also by likely undercounting based on the definition as the primary source of income and from respondents who do not
self-identify their work status in accordance with the bureau’s definitions.
NONTRADITIONAL WORKER STUDY 5
communities" is used to describe workers who have migrated to the U.S. for work opportunities and are either
documented or undocumented. The term includes second-generation immigrants whose wages and education
levels closely correlate with those of their first-generation parents.10
Survey data
Research findings quoted in this report from the 2019 Independent Contractor Study about the size and
prevalence of the independent contractor workforce are conservative estimates calculated from several
federal surveys including the Contingent Worker Survey, the Current Population Survey, and the Nonemployer
Statistics Survey. Qualitative findings from the 2019 Study are based on the Independent Contractor Online
Pilot Survey conducted for one month from March to April 2019. The Pilot Survey collected 2,941 responses
from individuals with an active sole proprietorship license from the Department of Revenue, and held four
focus groups – two in Seattle and two in Spokane, with 31 participants. Qualitative findings from survey
respondents and focus group participants do not represent the entire population of independent contract
workers in the state, nor the full diversity of Washington’s workforce.
Tax Data
This report uses tax data, obtained through the Department of Revenue. In-depth analysis of administrative
data was outside the scope of this report.
Occupational Data Analysis
This report intended to offer a deeper occupational analysis of the fastest-growing sectors for independent
contractors, as recommended in the 2019 Independent Contractor Study. Due to budget constraints, a
consultant was not engaged to conduct this analysis.
Services and Benefits for Nontraditional Workers
Who are we talking about?
For the purposes of this report, we created a categorization of traditional and nontraditional work
arrangements by analyzing agency definitions between tax reporting institutions — the Internal Revenue
Service (IRS) and the Washington State Department of Revenue (DOR) — and agencies that provide worker
protections, the Washington State Employment Security Department (ESD) and the Washington State
Department of Labor & Industries (LNI). The classifications in Figure 1 conform to these agency definitions, as
well as the tax recording documents that the IRS and DOR require from them, which make them distinct along
the employment spectrum. The Bureau of Labor Statistics and the U.S. Department of Labor (DOL) provided
additional definitions of workforce participants that satisfied “traditional workforce arrangements,” which also
qualify for state and federal benefits and worker protections. This report departs from the definitions used in
the 2019 Independent Contractor Study for the purposes of creating a broader regulatory inventory.
10 The Pew Charitable Trusts, The Economic Mobility Project, "Economic Mobility of Immigrants in the United States," (2016),
https://www.brookings.edu/wp-content/uploads/2016/06/07useconomics_haskins.pdf
NONTRADITIONAL WORKER STUDY 6
Figure 1: Nontraditional and Traditional Work Arrangements
Contingent Workforce
Self-Employed Employees
Sole-Proprietorships Independent Day Laborers Contract Workers Wage and Salary
Contractors Workers
Sole-Owner LLCs Agricultural On-Call Workers
Freelancers Migrant Commission Sales
Small Business Workers Temp. Agency Workers
Owners On-Demand Workers Workers
Casual
Gig-Workers Laborers Seasonal
Workers
Nontraditional Work Traditional Work
Arrangements Arrangements
No or Limited Access
Limited to Full
to Benefits and
Access to Benefits
Worker Protections
Definitions and tests vary among state and federal agencies because each has a specific administrative
function to determine benefit eligibility and/or compliance. State and federal laws mandate an employer to
provide benefits and labor protection based on a worker’s classification. These classifications also help
determine benefit eligibility if a worker becomes unemployed, has an occupational injury, or requests paid time
off for medical and family leave. To add to the complexity of these work arrangements, there may be
disconnect between what a worker perceives their work arrangement to be and how a state or federal agency
defines their work arrangement.11 See Appendix A for a summary of state and federal definitions and Appendix
B for a summary of independent contractor tests.
A "traditional worker" includes wage and salary workers, contract workers, on-call workers, temporary agency
workers, and seasonal workers. The worker classifications in these arrangements are categorized by their
ability to access benefits, state services, and labor protections that are robust across all state and federal
agency benefit platforms. It is important to note that some of the members of the traditional workforce may
not always have access to a full suite of benefits. These workers may have their benefit eligibility limited by
duration of employment or through agency-determined benefit application or enrollment determination
11 National Academies of Sciences, Engineering, and Medicine, "Measuring Alternative Work Arrangements for Research and Policy,"
(2020), https://doi.org/10.17226/25822
NONTRADITIONAL WORKER STUDY 7
periods. They may experience similar challenges in accessing state benefits as the nontraditional workforce.
See Appendix A for definitions of worker classifications.
This report uses "nontraditional work" to include the self-employed, small business owners having four or less
employees12, independent contractors, gig workers, freelancers, on-demand workers, day laborers, agricultural
migrant laborers, and casual laborers. The broader "self-employed" category is composed of small business
owners, sole-owned proprietorships and limited liability corporations, as well as independent contractors.
Independent contractors can include subset categories, such as gig-workers, freelancers, and on-demand
workers; however, these sub-categories cannot be applied as substitute terms for the independent contractor
category.
The emergence of "on-demand" and "gig" workers has spurred analysis within government agencies and
academic institutions to understand who these workers are and what work they perform. At present, there are
no widely accepted definitions or tests to determine who is an "on-demand" or "gig" worker, and how they are
distinct from independent contractors. All of the worker classifications in nontraditional arrangements are
categorized by their relative limitations and restrictions from accessing benefits, state services, and labor
protections. See Appendix A for Definitions for Worker Classifications.
What benefits and services are available to nontraditional workers?
Worker classifications largely determine what benefits may be accessible to a worker. The benefits matrix
(Table 1) below provides a broad view of worker classification and benefit eligibility for state and federal social
safety net benefits. These include benefits established by labor law and fringe benefits not explicitly required
through labor laws but provided by the employer or by the state. The self-employed, as described in Figure 1,
are grouped together into a single category within the table, based on how these classifications pay into state
and federal benefit systems. Similarly, worker classifications in traditional work arrangements as seen in
Figure 1 are grouped together in the benefits matrix. These groupings are not meant to imply that these
classifications are synonymous. Table 1 shows that workers in traditional work arrangements have greater
access to social safety net benefits than those in nontraditional arrangements.
Table 1
Benefits Matrix Access to Benefits Limited or Restricted Access to Benefits No Access to Benefits
Worker Classification Self-Employed/ Day Agricultural Casual Seasonal Traditional Work
and Service/Benefits Indt Contractors Laborers Migrant Workers Laborers Workers Arrangements
Apple Healthcare for
Individuals and
Households
Apple Healthcare for
Children
12 The U.S. Census use nonemployer statistics to describe the number of establishments and the number of employees per
establishment. The lowest grouping in these statistics is employers with 0-4 employees at the mid-March pay period. A business may
retain up to four employees throughout the year but have none at the point-in-time when recorded. An example of this type of
arrangement are seasonal-based businesses.
NONTRADITIONAL WORKER STUDY 8
Worker Classification Self-Employed/ Day Agricultural Casual Seasonal Traditional Work
and Service/Benefits Indt Contractors Laborers Migrant Workers Laborers Workers Arrangements
Apple Healthcare for
Undocumented
Immigrants
Private Healthcare
Coverage
Workers'
Compensation
Unemployment
Insurance
Long-term Disability
Insurance
Paid Sick Leave
Paid Family and
Medical Leave
Paid Vacation Time
Life Insurance
and
Accidental Death and
Dismemberment
Retirement Benefits
Working Connections
Child Care Subsides
Seasonal Child Care
Subsidies
Table 2 details the type of social safety net benefits offered by state and federal support systems. The
information was developed through coordination with the administrating agencies, review of statutory
documents, and a detailed examination of programmatic services from publicly available sources.
Table 2 shows that within each agency, workers in nontraditional work arrangements have to contend with a
complex set of requirements to be eligible for social safety net benefits. Most of these requirements center on
how much income a worker makes, whether that income falls within a benefits threshold, and on the worker's
ability to prove their income to the agency responsible for benefits delivery. These issues can be challenging
NONTRADITIONAL WORKER STUDY 9
for nontraditional workers to track and document because they may not work for a singular employer or in
employment structured to last longer than a year. A nontraditional worker is also often solely responsible for
navigating their eligibility. Their traditional worker counterparts may not share these same obstacles and may
be better equipped to engage in the state and federal benefits system, in part because employers must adhere
to certain federal and state requirements, and because employment arrangements are less nuanced.
When building a complete list of available benefits for each worker classification, the report authors observed
that information was presented in ways that made it difficult to discern benefits availability and eligibility. In
most cases, information for nontraditional workers was not readily apparent to the end user.
Table 2
Benefits Gaps and Access
Agency or
Agency Access Point
Benefit/Service (Source) Workforce Arrangement Access Points and Access Gaps
Access:
• Coverage available through HCA
• Coverage eligibility dependent on:
Apple -- Household size
Healthcare The Health -- Annual income
Coverage for Care Authority -- Citizenship status (if applicable)
Individuals and (HCA) Gaps:
Households • If eligible, coverage is available from the HCA year-round.
• Workers can lose coverage through increased annual household income while
also being unable to afford private coverage through the Exchange, private
sources, or COBRA insurance plans.
Access:
• Coverage available through HCA
• Coverage eligibility dependent on:
-- Household size
Apple The
-- Annual income
Healthcare Healthcare
-- Citizenship status (if applicable)
Coverage for Authority
Gaps:
Children (HCA)
• If eligible, coverage is available from the HCA year-round.
• Workers can lose coverage through increased annual household income while
also being unable to afford private coverage through the Exchange, private
sources, or COBRA insurance plans.
Access:
• Coverage available through HCA
• Coverage eligibility dependent on:
Apple
The -- Household size
Healthcare
Healthcare -- Annual income
Coverage for
Authority -- Citizenship status
Undocumented
(HCA) Gaps:
Immigrants
• If eligible, coverage is available from the HCA year-round.
• Workers can lose coverage through increased annual household income while
also being unable to afford private coverage
NONTRADITIONAL WORKER STUDY 10
Agency or
Agency Access Point
Benefit/Service (Source) Workforce Arrangement Access Points and Access Gaps
Access:
• Must elect for coverage through the WA Healthcare Exchange to receive
subsidized health insurance coverage.
• Reduced premiums available depending on annual income (up to 400%
The Federal Poverty Line).
Healthcare • Can elect for private coverage outside of the Exchange without subsidies
Authority • Coverage eligibility dependent on:
(HCA) -- Household size
-- Annual income
Private The Health • COBRA coverage allows displaced workers to remain on their employer's plan
Healthcare Benefits until additional health insurance coverage can be obtained.
Coverage Exchange Gaps:
(Exchange) • Coverage for subsidized private insurance is typically available during the
“open enrollment period,” from Nov. 1 through Dec. 15.
Private • 60-Day Special Enrollment Period in the Exchange available during "Life Event"
Healthcare (before or after event).
Market • Private insurance begins subject to terms and conditions of coverage.
• Coverage through the Exchange or private brokers may be cost prohibitive if
annual household income decreases; qualifying annual income requirements
may exceed income threshold for Apple Health eligibility.
• COBRA coverage may be cost prohibitive for displaced workers.
Access:
•Can elect for self-employed coverage through LNI when eligibility prerequisites
are complete:
-- Must file articles of organization with Secretary of State.
-- Must register business license with Department of Revenue.
-- Must register business license with city, where business is located.
Washington
•Day laborers and casual laborers are considered covered workers.
State
Workers' •Independent contractor are required to elect for coverage if they retain
Department of
Compensation employees.
Labor &
• Required quarterly tax payments to maintain coverage.
Industry (LNI)
Gaps:
• Industrial insurance cannot be purchased by workers on the private market.
• Nontraditional workforce arrangements have access to this benefit only if they
fulfill eligibility requirements.
• Coverage begins the day after LNI’s office receives the workers’ compensation
application request.
NONTRADITIONAL WORKER STUDY 11
Agency or
Agency Access Point
Benefit/Service (Source) Workforce Arrangement Access Points and Access Gaps
Access:
• Coverage available through ESD for independent contractors and day laborers.
• Temporary helpers are considered covered workers.
• Agricultural migrant workers are ineligible.
• Eligibility depends on work history
-- At least 680 recorded hours worked in the last 15-18 months required for
eligibility.
Washington -- At least some wages must have been earned in Washington.
State • Independent contractors are required to get coverage for workers they retain
Unemployment Employment as employees.
Insurance (UI) Security • Restrictions that typically barred nontraditional workers from UI were
Department temporarily lifted through provisions of the Federal CARES Act in March 2020.
(ESD) Gaps:
• There are no UI plans available for purchase on the private market.
• Numerous exemptions for various professions and nontraditional workers.
• Administrative delays on UI distribution
-- ESD must verify hours worked with each employer a worker cites.
-- Receiving benefits depends on verification of work history by ESD.
• Pandemic Unemployment Assistance (PUA) benefits are scheduled to expire
at the end of 2020.
Access:
• Can elect for private insurance coverage.
Social Security • Federal benefits available from the SSA are mediated through DSHS.
Administration • Federal benefits eligibility dependent on payments into SSA credits system
(SSA) and disability status.
• Benefits can be from the private/public partnership and mediated by:
Washington -- DSHS
State -- HCA
Department of -- Private insurance marketplace
Social and • Agricultural migrant laborers are not eligible for SSA benefits due to tax
Long-Term
Health recording procedures that do not require them to pay FICA taxes.
Disability
Services Gaps:
Benefits
(DSHS) • Navigating the administrative requirements can be a multi-year process
creating gaps when these workers need benefits or income but are unable to
The Health work.
Care Authority • Private long-term disability insurance is unsubsidized and may be cost
(HCA) prohibitive
• Other benefits can cover the initial gaps before receiving LTD benefits from
Private Health state or federal sources including:
Care Market -- Paid Family and Medical Leave (if elected to coverage).
-- Workers' compensation (if elected to coverage and injury or illness occurs
at/on worksite).
NONTRADITIONAL WORKER STUDY 12
Agency or
Agency Access Point
Benefit/Service (Source) Workforce Arrangement Access Points and Access Gaps
Access:
• Independent contractors, day laborers, and casual laborers are not entitled to
Washington
paid sick leave.
State
• The only mandated benefit afforded to nontraditional workers in Washington
Department of
Paid Sick Leave is paid sick leave to agricultural migrant workers who hold a valid H-2A visa
Labor &
from the U.S. Customs and Immigration Service.
Industries
Gaps:
(LNI)
• There are no available private options to supplement lost wages when these
workers need time off.
Access:
• Nontraditional workers can elect to enroll through ESD as self-employed
workers (with necessary requirements) for a three-year enrollment period,
annual enrollment for subsequent years.
Washington
-- Must file articles of organization with Secretary of State.
State
-- Must register business license with Department of Revenue.
Paid Family and Employment
-- Must register business license with city, where business is located.
Medical Leave Security
• Casual laborers and agricultural migrant workers are covered by their
Department
employer.
(ESD)
Gaps:
• Must work at least 820 hours in Washington during "qualifying period" before
benefit is accessible
• Worker must be experiencing, or will experience, a “qualifying event.”
Access:
U.S. • No eligibility for nontraditional workers.
Paid Vacation
Department of Gaps:
Time
Labor • There are no private market solutions for nontraditional workers to engage
this benefit.
Access:
• Survivor benefits are available from the SSA, if payment requirements into the
Life Insurance program are satisfied.
Social Security
and Accidental • The nontraditional workforce can elect for private coverage.
Administration,
Death and • Agricultural migrant laborers are not eligible for SSA benefits due to tax
(SSA)
Dismemberment recording procedures that do not require them to pay FICA taxes.
Gaps:
• Navigating the administrative requirements can be difficult.
NONTRADITIONAL WORKER STUDY 13
Agency or
Agency Access Point
Benefit/Service (Source) Workforce Arrangement Access Points and Access Gaps
Access:
Social Security • Nearly all workers are able to engage in the Social Security (SS) program for
Administration retirement income benefits given certain payment conditions are met.
(SSA) • Agricultural migrant workers are not required to pay into the SS program with
their wages.
Washington • There are available private retirement options.
State • Commerce developed the Retirement Marketplace to make choosing
Retirement
Department of retirement plans for self-employed and businesses easier for consumers.
Benefits
Commerce • Nontraditional workers to pay quarterly taxes into the SS program through
(Commerce) self-employed taxes to the IRS.
Gaps:
Private • Workers may face difficulties determining the most appropriate investment
Retirement vehicles and require assistance from a retirement investment professional.
Investments • Workers must be capable of setting aside capital for investments in addition
to paying for monthly expenses.
Access:
Washington • There are two types of child care subsidies available to Washington workers:
State --Working Connections Child Care (WCCC)
Department of --Seasonal Child Care (SCC) benefits, meant to support the seasonal
Child Care
Children, agricultural workforce.
Benefits
Youth, & • Subsidies through DCYF are dependent on household income threshold.
Families Gaps:
(DCYF) • Annual income threshold is the primary restriction in access to these benefits.
• There are limited licensed child care providers in Washington.
NONTRADITIONAL WORKER STUDY 14
Key Findings
State agencies experience multi-layered challenges interacting with
nontraditional workers.
State agencies struggle with accommodating nontraditional complex work
arrangements
Most government offices are accessible from 8 a.m. to 5 p.m., during what is considered standard operating
hours. The Department of Children, Youth and Families reported attempting to serve communities during
nonstandard hours, however, there was a challenge finding state-employed staff to work those hours. Further,
Louisa Erickson, Workforce Development and Policy Administrator at DSHS, notes the majority of residents
accessing state services fall into traditional worker categories. This means that there may be a consequence
that the frontline worker may not have the specific resources or knowledge to assist the needs of
nontraditional workers. DSHS also reports high turnover or promotion of frontline workers, making it
uncommon for a frontline state worker to have the opportunity to build a skill set delivering services to
nontraditional workers.13
Agency systems are designed for traditional work arrangements
Most state systems are designed to support workers and employers that engage in steady, long-term
employment. Some agencies do provide a pathway to benefits to the self-employed, if they are small business
owners and hold a Unified Business Identifier number (UBI) that authorizes business practice in Washington
State. In some cases, an independent contractor may elect to obtain a UBI number. However, some
independent contractors do not elect to obtain UBI numbers because of immigration status or due to
unsatisfactory qualification requirements.14 For example, a person without legal immigration status can apply
for a business license but a Social Security number is required if the person applying for the license is going to
hire employees and the requirement of a Social Security Number may serve as a deterrent.15 Acquiring a UBI
number requires a knowledge base as to its purpose, and an understanding of what the tax and documentation
responsibilities entail. Lacking the knowledge or ability to get a UBI number can have a cascading affects
through the state benefits system for workers who are in nontraditional arrangements. Without a UBI number,
a worker would be ineligible for any state service that requires them, such as electing into Workers'
Compensation or the Paid Family and Medical Leave programs.16
Federally funded unemployment insurance, provided through the Employment Security Department (ESD), does
not serve undocumented workers, due to federal constraints. State statute additionally does not allow certain
other groups to access state unemployment insurance, including H2A workers. 17 Because individuals need to
have worked 680 hours during a 12-month period in order to qualify for benefits, workers who do not have
long-term employment, steady employment, those that work variable or unusual hours, or those who have gaps
13 State Agency Roundtables on nontraditional work, September 15 and September 22, 2020. Agencies with representatives in
attendance: COM, DCYF, DOR, DSHS ESD, HCA, LNI, WTECB and interviews conducted between September 24-28, 2020
14 Department of Revenue, "Apply for a business license,: (2020), https://dor.wa.gov/open-business/apply-business-license
15 Ginatta, Antonio, personal communication, October, 15, 2020
16 Washington Paid Family and Medical Leave, (2020), https://paidleave.wa.gov/
17 The H-2A temporary agricultural program establishes a means for agricultural employers who anticipate a shortage of domestic
workers to bring nonimmigrant foreign workers to the U.S. to perform agricultural labor or services of a temporary or seasonal nature
authorized in Section 218 of the Immigration and Nationality Act, https://www.dol.gov/agencies/whd/agriculture/h2a
NONTRADITIONAL WORKER STUDY 15
in employment may have a difficult time qualifying for benefits. The independent contractor, by definition in
state and federal statute, controls their own work and can hold multiple clients at one time. Therefore, the loss
of any one job is perceived as less consequential than for a worker who loses their job through their loss of
partial income, due to the expectation that an individual can seek additional work or clients to fill the gap.
State and federal payroll taxes also favor work arrangements that are steady and long-term. If an employer has
intermittent and varied staffing needs, they may have many shorter-term employees that they retain year-to-
year or project-to-project. With more recorded employees, no matter the duration or longevity of the work
relationship, these employers will bear higher tax rates, a factor that their operations must be prepared to
support.18
Nontraditional work has associated stigmas
Agencies noted that there is a systemic stigma of what constitutes work, and the value placed on certain
occupations and not others, that needs to be overcome. Interviewees from the performing arts sector reported
that the creative sector is viewed as a secondary workforce, a product of what they called "creative
romanticism."19 Louisa Erickson of DSHS summarizes, “We have picture of what a worker is and what work is.
There are challenges around creating strong pathways, because the outcomes are less easily described. There
is less experience in supporting people along these pathways. There needs to be a change to how we view
workers as the ways that workers engage in the workforce is changing.”
Compliance and enforcement
mechanisms have unequal impacts "The nuts and bolts is that these are individual
Some state agencies require compliance and enforce and existential philosophical debates – what
people believe about other people, what
penalties, and this role presents interconnected challenges.
makes a “real job” and how there are values
Some state agencies reported awareness of companies that put on one job versus another, or one industry
continually do not comply with labor and employment versus another. It’s the curse of individualism
requirements. These companies are often repeat compliance that gets in the way of progress.”
offenders and are a cost burden to the state, in legal fees and
through staff time and capacities. Agencies reported that Anonymous, Film Industry
some companies pay the penalty fines but then continue to
engage in noncompliant employment practices.20
Interviewees in both the creative sector and immigrant communities reported knowledge of the abuse of large
companies or employers misclassifying workers. There is a potential disincentive in some cases for less
consistent and stable workers to be classified correctly by employers because of the additional cost on the
employer in federal and state payroll taxes to classify them correctly.21 Shellea Allen of SAG-AFTRA, a union
representing screen actors and television and radio artists, commented on the practice of how companies
respond to Request for Proposals. For example, Allen notes that large companies competitively selecting the
lowest-bid projects for projects in areas such as corporate education take part in the practice of misclassifying
subcontractors of a project in order to have lower bids.
18 State Agency Roundtables on nontraditional work, September 15 and September 22, 2020. Agencies with representatives in
attendance: COM, DCYF, DOR, DSHS ESD, HCA, LNI, WTECB and interviews conducted between September 24-28, 2020
19 Creative Sector and Immigrant-Focused Organization interviews conducted between this July 8, and August 10, 2020
20 State Agency Roundtables on nontraditional work, September 15 and September 22, 2020. Agencies with representatives in
attendance: COM, DCYF, DOR, DSHS ESD, HCA, LNI, WTECB
21 Creative Sector and Immigrant-Focused Organization interviews conducted between this July 8, and August 10, 2020
NONTRADITIONAL WORKER STUDY 16
According to the Migration Policy Institute report, "Strategic Leverage: Use of State and Local Laws to Enforce
Labor Standards in Immigrant-Dense Occupations," misclassification is more common in industries with
seasonal employment, dangerous work conditions, and low wages. The report highlights that misclassification
significantly lowers a company’s payroll cost, removes the wage floor, and sidesteps paying into the worker’s
safety net and contributing to taxes. More responsibility and liability is shifted onto the worker. Workers
generally lack intermediaries and resources to access assistance, like unions and worker-led groups or in filing
complaints or getting retaliation protection. Additionally, workers would otherwise potentially lose the
immediacy of a paycheck, should they not accept available work.22
Penalties and other measures can be viewed as punitive by businesses or individuals being audited. Some
employers are struggling to understand their obligations, not to evade compliance, but to fulfil their missions
and to be able to provide opportunities to the workers they employ. In these instances, there can be an inherent
distrust in agencies that monitor compliance and a perceived risk on the part of the employer to interact with
state agencies.23 Some organizations are struggling operationally, due to a variety of circumstances, and are
making choices based on financial thresholds and information that they think are legal within a system that
subjects them to penalties, even if noncompliance was inadvertent. 24
Challenges for Nontraditional Workers
Nontraditional workers can face
unique occupational realities
Occupations and industries create different
challenges for government systems for both the “We had five to six core staff at any given time.
Sometimes, payroll could have as many as 40 people
worker and the employer. Certain industries, such
on it. An employee is a significant added cost. We
as the creative sector, are primarily project-based.
always had to pay attention to the thresholds, and
Projects require specific skills for defined employment distinctions, whether an employee or a
durations to fulfil project specifications. Workers contractor. There are real hardships to trying to fill all
in particular industries or occupations may have these gaps, for arts organizations, for the workers, for
seasonal employment with various employers. other public institutions. We were always doing our
best to fill needs in the community but there was a
There is evidence that some workers choose push and pull with regards to capacity and money. The
nontraditional work because it offers them theater is always trying to do more with less – and I
flexibility, freedom and variety.25 This however, was working for a theater that was resourced with a
comes at a cost of organizational ties and very high fundraising capacity!”
income stability.26 Scott Michael, Legal Services Anonymous, Performing Arts Organization
Coordination Manager at ESD, perceives this
tradeoff from his position working in
unemployment insurance. Michael is aware of instances in which workers are offered flexibility and potentially
22 Migration Policy Institute, Andre Elmore and Muzaffar Chishti, "Strategic Leverage: Use of State and Local Laws to Enforce Labor
Standards in Immigrant-Dense Occupations," (March 2018), https://www.migrationpolicy.org/research/strategic-leverage-use-state-
and-local-laws-enforce-labor-standards-immigrant
23 State Agency Roundtables on nontraditional work, September 15 and September 22, 2020. Agencies with representatives in
attendance: COM, DCYF, DOR, DSHS ESD, HCA, LNI, WTECB
24 Creative Sector and Immigrant-Focused Organization interviews conducted between this July 8, and August 10, 2020
25 Department of Commerce, 2019 Independent Contractor Study;
26 Berliner, Uri, NPR, "Jobs In The Pandemic: More Are Freeland And May Stay That Way," (September 2020),
https://www.npr.org/2020/09/16/912744566/jobs-in-the-pandemic-more-are-freelance-and-may-stay-that-way-forever
NONTRADITIONAL WORKER STUDY 17
higher wages in exchange for agreeing to be classified as contractors. These workers may then believe they
are not entitled to worker protections and benefits, such as unemployment insurance, when in fact, entitlement
to these protections and benefits is based on state law and not an agreement the worker signed. Melissa
Purcell with IATSE Local 488, a union for production technicians, also commented that there is a time in a
worker's early career where they may be less knowledgeable on their rights and are looking to develop in their
profession, so the absence of a safety net may feel less vital.
Workers can lack power within their employment arrangements
Employers are responsible for correctly classifying their workers. In some cases, the worker does not have
knowledge of their employment status. Purcell commented on the lack of power that workers had in situations
when they knew they were misclassified, saying that if the worker needed income immediately, speaking up
could prove to be too big of a risk.
For both the creative sector and immigrant communities, one's employment arrangement – traditional or
nontraditional worker – was often not a choice, but a reality shaped by a worker’s particular skill set,
knowledge, access, or opportunity to a certain job or industry.27 For example, María Sigüenza Director of the
Washington State Commission on Hispanic Affairs (CHA) discusses that language access providers are
generally nontraditional workers because agencies do not perceive a need for these positions to be steady,
long-term positions. These positions have relatively low barriers to entry, but are not without challenges.
Interpreters frequently need to travel to various worksites in a single day. It takes a long time to establish
credibility with communities for whom an interpreter works with. The job is location dependent; a worker needs
to be where there are populations that require communication in the target language.
Nontraditional workers have capacity limitations
A worker's knowledge, finances, and time can limit their compliance with independent contractor or small
business requirements in both sectors.28 A worker's income can determine whether they are able to seek
outside assistance for technical information, including state and local requirements. If earnings are high
enough, a worker may be able to hire technical professionals such accountants or lawyers.29 Amy Lillard,
executive director of Whipsmart notes, “It is difficult for nontraditional workers to find the technical assistance
they need from state agencies. When creatives try to seek help, state agencies often don’t have the time,
27 Creative Sector and Immigrant-Focused Organization interviews conducted between this July 8, and August 10, 2020
28 Ibid
29 Ibid
NONTRADITIONAL WORKER STUDY 18
bandwidth or industry expertise to be helpful. This
is exacerbated by the fact that creatives don’t know
what they qualify for and the state doesn’t
understand creative work. So when they engage, "We work with immigrants, most of whom aren’t born
it’s like they don't speak the same language. That’s in the United States. English can be limited.
one of the reasons why Whipsmart needs to exist, Technology might only be accessed via cell phones,
not computers. The people we work with are
to be the bridge and facilitate communication.”
mothers and fathers, looking for new avenues for
self-employment and resources for their children. Or
Interviews suggest that companies hiring
older individuals who have had no other opportunity
independent contractors, specifically government
to grow their wealth. Housecleaners, janitorial work
agencies, private businesses or corporations, do – those jobs are easy to connect to, to fall into.
not actively play a role in educating or assisting There is room for exploitation, especially in
contractors in understanding their employment franchising with significant risk managing client and
classification or responsibilities for subcontracting. supplier relationships, fees, etc. When worker
One interviewee commented that they had to hire protections and accompanying requirements are
their own mentor to manage their professional added, lawmakers need to consider how individuals
growth and advance their skills and knowledge. will navigate added bureaucracy with minimal
resources. Also, without the right work permits or
Interviewees all discussed reliance on their social security numbers, you may not be qualified to
communities to access information and to find and be a traditional employee. Or you pay taxes into a
system, but you’ll never be able to access what you
obtain work.30 Immigrant communities are quite
put into the system, like unemployment insurance.
dependent on community service organizations for
The safety net isn’t there."
technical and professional expertise; and the
intentional connection and established trust with Anonymous, Community Based Service
these service organizations was essential in their Organization
31
efficacy. However, community-based information
can be insular and potentially incomplete and leave
vulnerable populations little ability to exit entrenched occupational norms, legal or not. 32 For immigrant
communities in particular, there are structural and social barriers to accessing capital and a lack of opportunity
for peer mentorship.33
This can be true for the nonprofit sector as well, which is reliant on fundraising and philanthropy to operate, in
addition to however they earn direct revenue. Often, nonprofits are providing services for the good of a
community that are otherwise not supplied through public or private sources. Navigating state agency
guidelines requires substantial access to information, professional expertise, and other financial resources.34
Additionally, they face other resource conundrums when paying into social safety net systems for workers. For
example, due to the nature and duration of a worker's employment, the worker and employer both may have
short-term, infrequent or one-off work engagements.35
30 Creative Sector and Immigrant-Focused Organization interviews conducted between this July 8, and August 10, 2020
31 Ibid
32 Ibid
33 Wirtz, Ron, Federal Reserve Bank of Minneapolis, "COVID-19: Another strain for minority-, women-, and veteran-owned firms," (May
2020), https://www.minneapolisfed.org/article/2020/covid-19-another-strain-for-minority--woman--and-veteran-owned-firms
34 Creative Sector and Immigrant-Focused Organization interviews conducted between this July 8, and August 10, 2020
35 Ibid
NONTRADITIONAL WORKER STUDY 19
Outreach is limited
Communication and outreach are crucial to
reaching nontraditional workers so they are aware "[Regulatory] agencies don’t have connections with
of their rights and responsibilities, and to ensure immigrant populations. There’s been neglect,
that they have access to the benefits that are community-based organizations have not been
36
available to them. Further, employers who hire compensated. There’s a lack of resources and
nontraditional workers need to be educated on information. It’s more than streamlining
their respective responsibilities.37 Communication communication. Many immigrant contractors rely on
their own community members for information and
and outreach strategies are essential for all state
resources… trusted messengers and leaders within
agencies and government programs, whether
those communities to get out information and
there is a service to be accessed or education of resources in their own language for those non English
regulations that require compliance. María speaking folks. They do not use existing
Sigüenza, Director with CHA, notes that the organizations for information and
agency is frequently called by people in need of resources. Intentional outreach is key."
other agency referrals to navigate what other
Ben Cabildo, AHANA, Spokane
agencies; require of them; there is often confusion
finding out what needs to be done or who needs
to be contacted. There’s a need to bridge the knowledge gaps and the best ways for agencies to do that in
local communities.38 Sigüenza comments that there is no one-stop shop for services or workers; municipal-
and state-level government outreach needs to be strengthened through interagency coordination to provide
workers with information about regulations and their responsibilities.
Geographical, cultural and demographic barriers can make communication challenging. JB Bennis, Community
Engagement and Outreach Specialist with Commerce, further explains, “When we come up with applications,
there are sometimes big hurdles for people to apply. We’ve heard about cultural divides. For instance in
Yakima we’ve heard that there are misunderstandings that can put people in a vulnerable place. The way that
we do business in Olympia, is different than the way work is done in Yakima.”
Washington’s diverse cultural communities have distinct disadvantages
interacting with government agencies
Tammy Deets, Trades Specialist at Commerce, notes that many communities have an inherent distrust in
government established through both direct experience and perception. She continues to say, “While we do
have translated versions of materials on websites, if you are not a native English speaker, it makes accessing
state systems difficult and daunting to access available benefits or to access technical information."
Interviewees representing immigrant communities reported workers connected to employment through “word
of mouth” from family, friends, and/or trusted community members.39 Interviewees detailed that many
immigrants rely on their own community members or community-based organizations that work with trusted
messengers and leaders for information. They discussed the great need for resources in their communities’
own languages, when English may not be their primary language. The Migration Policy Institute in the article,
"Integration: The Role of Communities, Institutions, and the State," supports this, describing the collective level
36 Creative Sector and Immigrant-Focused Organization interviews conducted between this July 8, and August 10, 2020
37 State Agency Roundtables on nontraditional work, September 15 and September 22, 2020. Agencies with representatives in
attendance: COM, DCYF, DOR, DSHS ESD, HCA, LNI, WTECB and interviews conducted between September 24-28, 2020
38 Creative Sector and Immigrant-Focused Organization interviews conducted between this July 8, and August 10, 2020
39 Ibid
NONTRADITIONAL WORKER STUDY 20
role of immigrants' communities in mobilizing their
work, housing, education and other social and cultural
adaptations. "Primarily, federal and state policies disallow
undocumented workers from working lawfully,
Similarly to the creative sector, interviews with nor are state systems able to effectively
community-based organizations for this report recognize these worker's contributions to the
discussed that many workers within their state's economy. It is unlawful to hire a worker
communities work three to four jobs across a variety who does not have a worker authorization. This is
of occupations or industries. Some of those jobs may one reason that sometimes undocumented
be traditional work, some work may be contracted, workers work as independent contractors. No
and some jobs may be within a family-owned other option exists for them, besides working in
business. Interviews noted traditional employment the informal economy, which, sometimes, is
often available to immigrants in industries such as easier.
hospitality, food services, long-term care, and janitorial
services. These jobs offer low wages, are often part- "Working as an independent contractor still
time, and often do not offer benefits.40 poses risks for undocumented workers.
Additionally, as independent contractors, workers
The COVID-19 Pandemic and its still pay into the federal social safety nets, such
as social security taxes. When the worker
Impact on the Nontraditional becomes eligible to retire, they do not have
Workforce access to a system they paid into.
The COVID-19 pandemic exacerbated existing "Finally, there are benefits for which access by
disparities in Washington's workforce, including undocumented workers is ambiguous. When
inconsistent broadband access, technical fluency programs require social security numbers that
disparities, and outreach efforts that are underfunded creates a significant burden on the individual to
or understaffed. Additionally, expanding benefits to access this program, even if technically eligible.
serve nontraditional workers outcomes during the
pandemic, reinvigorated pre-pandemic challenges of There is also the reality, that there is also
state agencies needing to track outcomes of activities hesitancy in this population to have any
such as training investments and work-search interaction with government agencies. The risk of
requirements.41 Agencies agree that the deportation for these workers or their families is
Washingtonians who had adequate capacity and always present."
access to resources to allow themselves to pivot, shift
and adapt were more successful at receiving support Antonio Ginatta, Columbia Legal Services
thus far in the pandemic. However, this access was
not universal.42
40 Revisit with a different source - for now, from the creative sector interviews
41 State Agency Roundtables on nontraditional work, September 15 and September 22, 2020. Agencies with representatives in
attendance: COM, DCYF, DOR, DSHS ESD, HCA, LNI, WTECB and interviews conducted between September 24-28, 2020
42 State Agency Roundtables on nontraditional work, September 15 and September 22, 2020. Agencies with representatives in
attendance: COM, DCYF, DOR, DSHS ESD, HCA, LNI, WTECB and interviews conducted between September 24-28, 2020
NONTRADITIONAL WORKER STUDY 21
State and Federal Flexibility
Support expended to nontraditional workers was a result of federal changes or emergency rulemaking.
Agencies are considering how to continue to provide services and access, but without additional funding, such
as from grants, the “how” looks uncertain.43
For example, ESD was able to allow the Workforce Training and Education Board (WTECB) to use Workforce
Innovation and Opportunity Act (WIOA) Title 1 funding for food service benefits. The state's youth funds were
able to provide food for youth at the state's local one-stop centers because the U.S. Department of Labor (DOL)
provided regulatory relief in the WIOA Final Rule allowing food as an allowable expense. ESD was able to
communicate the guidance to the WTECB and the flexibility will remain in place as long as DOL continues to
allow it.44 The Healthcare Authority (HCA) was also able to adapt their telehealth services because Governor
Inslee declared a public health emergency in the state.45
Broadband Access and Digital Literacy
Agencies rely on digital communication, but there are gaps across the state for digital access and literacy.46
Eric Wolf, Deputy for Policy and Programs with the WTECB noted, “Digital literacy is among the most important
skills that workers need, and will need, in the 21st century.” In the wake of COVID-19, state agencies have
found efficiencies in utilizing and amplifying their own digital access tools to save time and money, and allow
for expanded access. Some report developing webinars and other web-based tools because they are receiving
more industry or community requests. Due to the digital nature of these interactions, agencies are finding that
they are reaching groups they never had before, and that the opportunities have higher attendance.47
Russ Elliott, Director of the State Broadband Office within Commerce noted, “The pandemic has highlighted
how inequitable and inconsistent broadband access is. Online access is not ubiquitous. There are
demographic, age, and industry discrepancies.” Access to teleworking jobs that are available during the
pandemic require equipment and a level of training and knowledge that individuals may not be equipped for.48
Individuals who can work online have access to employment, whereas people who are not able to work online
have become more reliant on the safety net system.49 As an example, HCA highlighted the importance of a
cohesive broadband strategy for the delivery of telehealth for a variety of medical services.50
Commerce is currently conducting a broadband mapping project that will give a clear picture of where there is
broadband access across the state. The agency will develop a policy framework structured around four equal
components: access, equipment, affordability and training.51 Tammy Deets with Commerce summarized, "the
pandemic highlights cracks in our system, and how nontraditional workers seem to be playing a much larger
role than society recognizes. Because of this, we need to look into shoring the up system. Broadband access
43 State Agency Roundtables on nontraditional work, September 15 and September 22, 2020. Agencies with representatives in
attendance: COM, DCYF, DOR, DSHS ESD, HCA, LNI, WTECB and interviews conducted between September 24-28, 2020
44 State Agency Roundtables on nontraditional work, September 15 and September 22, 2020. Agencies with representatives in
attendance: COM, DCYF, DOR, DSHS ESD, HCA, LNI, WTECB and interviews conducted between September 24-28, 2020 and email
communication with Gary Kamimura, ESD, October 13, 2020.
45 State Agency Roundtables on nontraditional work, September 15 and September 22, 2020. Agencies with representatives in
attendance: COM, DCYF, DOR, DSHS ESD, HCA, LNI, WTECB and interviews conducted between September 24-28, 2020
46 Ibid
47 Ibid
48 Ibid
49 Ibid
50State Agency Roundtables on nontraditional work, September 15 and September 22, 2020. Agencies with representatives in
attendance: COM, DCYF, DOR, DSHS ESD, HCA, LNI, WTECB and interviews conducted between September 24-28, 2020
51 Ibid
NONTRADITIONAL WORKER STUDY 22
would help all workers, not just nontraditional workers. These services are becoming like water and power;
they are essential."
The Creative Sector
The Brookings Institute published the study "Measuring COVID-19's devastating impact on America's creative
economy" in August 2020. The report highlights that the creative sector is one of the most impacted sectors of
the economy during the pandemic crisis. The report estimates that Washington State lost 30.3% of creative
sector jobs (a total of 78,402 jobs) between April and July of 2020. The report reinforces that many creative
workers are self-employed or freelancers. Many projects in the creative sector are dependent on opened
economies and the ability to safely congregate.
A survey jointly administered by Whipsmart and Washington Filmworks reported that workers in the creative
sector most frequently tried to access unemployment benefits in the wake of the pandemic. Of those surveyed,
nearly half who attempted to access the system didn't understand if they were eligible, and 49% were delayed,
rejected, or had repayment demands from claims that ESD had already paid out to applicants. The survey also
found some workers gave up trying to access unemployment.
Access to health insurance was the top concern cited following unemployment benefits. Ninety-three percent
of respondents reported having access to health insurance in July 2019. That number fell to 66% reporting
insurance coverage in July 2020, and 24% of respondents reported their coverage was at risk.52
A pre-pandemic 2019 U.S. Bureau of Economic Analysis report found that Washington State's creative sector
represents 7.8%, or $35.6 billion, of the state's GDP. At the time the report was published, Washington had
17,642 business and nearly 70,000 jobs involved in the creation or distribution of the arts.53 Many workers in
the sector were impacted at the beginning of the pandemic in March 2020, and it will likely be one of the last
sectors to return to capacity due to social distancing requirements.54
Some in the creative sector report feeling like members of a "forgotten workforce." While other industries have
received government assistance, the creative sector has been overlooked. IATSE 15, a union for stagehands
and other technical professionals in Seattle, reports 90% of their workforce is out of work, with no jobs in
sight.55 Some nontraditional wages have historically been ineligible for unemployment insurance claims, or are
so widely perceived as being ineligible for unemployment insurance claims that workers do not apply for
benefits. Within the creative sector specifically, a significant portion of the industry are mixed-income workers
due to the project-to-project nature of the work. IATSE 15 advocates for long-term assistance and specific
consideration of the industry, due to the sustained impacts of pandemic closures.56
Immigrant Communities
Nationally, immigrants make up 17% of the U.S. workforce. As a whole, immigrant populations are twice as
likely to work within industries that misclassify workers and violate workplace standards in industries like
52 Whipsmart Washington Filmworks, "Social Safety Net Survey, Initial Findings," (September 2020)
53 Americans for the Arts Action Fund, "Why the Arts Matter in Washington State", (2019)
54 Washington State Arts Commission, "Summary of Statewide Findings," (2020), https://www.arts.wa.gov/wp-
content/uploads/2020/08/Statewide-Survey-handout-FINAL.pdf
55 Sillman, Marcie, KUOW, "Thousands of Seattle-area cultural workers winder if they'll ever return to work as pandemic drags on,"
(October 2020), https://kuow.org/stories/as-the-pandemic-drags-on-thousands-of-seattle-area-cultural-workers-wonder
56 Ibid
NONTRADITIONAL WORKER STUDY 23
construction, transportation, cleaning and food preparation.57 In 2009, OneAmerica published a study on
immigrant contributions to the workforce.58 At the time of that report, immigrants had a higher rate of business
formation than native peers nationally, starting 16.7% of all new businesses in the United States. In 2009,
approximately 10% of all businesses in the state were immigrant-owned. Also of note, a higher percentage of
the immigrant population is of working age compared to the aging population in the country and in Washington
State. While there is a general lack of information of country of origin and nationality within specific industries
or occupations, the 2009 report notes that Asian workers tend to be the largest immigrant group in
management and professional occupations, and Latin American and Asian workers tend to be the largest
group of foreign-born workers in service occupations.
According to the Migration Policy Institute report
on immigrant workers, immigrants tend to
experience conditions that make them more "Policy and programs try to work for everybody – that
susceptible to COVID-19, including having lower doesn’t work. Each community is different. And within
earnings, living within communities with a higher specific communities, there is not one voice. There
are elders and young people, for example. There’s little
share of people of color who are at higher risk for
support from government, city, county or state. The
COVID-19, and facing greater amounts of
need for support is highlighted in the pandemic. When
household overcrowding. The report highlights information comes out, it’s English first. Always.
that immigrant communities face increased Applications with tight turnarounds are only available
barriers to health insurance, particularly due to in English. By the time community support
lack of coverage from employers in the informal organizations learn about an opportunity and can
or nontraditional industries and occupations or assist their communities, the support window has
due to ineligibility due to immigration status. closed. It takes hours or days to connect with state
During the pandemic, immigrants are agencies. When someone does get through, language
experiencing a higher unemployment rate, support lags, the needed language is unavailable. If
the information is available in specific languages, it’s
particularly because of their disproportionate
only put out online. Some people don’t have access to
representation in industries most impacted by the
online information. A digital divide really does exist,
pandemic, including retail, leisure and even in cities like Seattle. Government agencies
hospitality.59 regularly don’t offer community organizations lead
time, if there’s any allotted at all, and have low levels
The Community Service Organizations serving of consideration and weak attempts at collaboration.
immigrants have adapted through emergency Decisions effect people’s lives. Departments have to
measures, such as providing food and other free develop relationships and maintain them in times of
services. Interviewees with community-based non-crisis."
groups frequently commented that state and
Jamie Lee, Seattle Chinatown International District
other government offices lacked timely and Preservation and Development Authority, Seattle
relevant communication. Community
organizations felt as though there was not access
to address the barriers and specifics of their communities and that what was needed were relationships
57 Elmore, Andre, Chishti Muzaffar, Migration Policy Institute, " Strategic Leverage: Use of State and Local Laws to Enforce Labor
Standards in Immigrant Dense Occupations," (March 2018), https://www.migrationpolicy.org/research/strategic-leverage-use-state-
and-local-laws-enforce-labor-standards-immigrant
58Jayapal, Pramila, Curry, Sean, OneAmerica, "Building Washington's Future, Immigrant Workers' Contribution to Our State's Economy,"
(2009), http://weareoneamerica.org/wp-content/uploads/Immigrant_Contributions.pdf
59 Capps, Randy, Batalova, Jeanne, Gelatt, Julia, Migration Policy Institute, "COVID-19 and Unemployment: Assessing the Early Fallout
for Immigrants and Other U.S. Workers," (June 2020), https://www.migrationpolicy.org/research/covid-19-unemployment-immigrants-
other-us-workers
NONTRADITIONAL WORKER STUDY 24
maintained and invested in prior to the pandemic, not as an afterthought during. Partnerships require
resources, trust, and communication.60
All state agencies reported that a resilient and equitable recovery was their goal.61 However, because the
systems, evaluation measures, goals, and programs have not yet developed specific processes for addressing
equity with metrics and strategy, it is difficult for Washington's diverse populations to have equal access to
relief and rebuilding opportunities.62 Integrating equity by nature of the process is a long-term effort.63 For
example, many pandemic-related funds provided by state and federal sources were based on competitive
procurements.64 These competitive processes focused on economic output or made provisions for essential
services, neither of which fully captured the need or the capabilities of the creative sector or immigrant
communities.65 The shortfall of these processes left many in both of these groups without financial support.66
60 Creative Sector and Immigrant-Focused Organization interviews conducted between this July 8, and August 10, 2020
61 State Agency Roundtables on nontraditional work, September 15 and September 22, 2020. Agencies with representatives in
attendance: COM, DCYF, DOR, DSHS ESD, HCA, LNI, WTECB and interviews conducted between September 24-28, 2020
62 Poverty Reduction Workgroup, "Reducing Poverty & Inequality in Washington State, Coordinating Draft," (January 2020),
https://dismantlepovertyinwa.com/wp-content/uploads/2020/02/2020_Jan_21_PRWG_10_year_plan_COORDINATING_DRAFT.pdf
63 Penninx, Rinus, Migration Policy Institute, "Integration: The Role of Communities, Institutions, and the State," (2003),
https://www.migrationpolicy.org/article/integration-role-communities-institutions-and-state
64 Creative Sector and Community Based Organization interviews conducted between this data and this date, 2020
65 Poverty Reduction Workgroup, "Reducing Poverty & Inequality in Washington State, Coordinating Draft," (January 2020),
https://dismantlepovertyinwa.com/wp-content/uploads/2020/02/2020_Jan_21_PRWG_10_year_plan_COORDINATING_DRAFT.pdf
66 Creative Sector and Community Based Organization interviews conducted between this data and this date, 2020.
NONTRADITIONAL WORKER STUDY 25
Recommendation
Agencies expressed strong interest in on-going interagency collaboration and problem solving around
challenges and opportunities to better serve and access nontraditional workers. Interviewees within the
creative sector and immigrant communities unanimously expressed a variety of challenges when
interacting with agencies. Establish and resource an interagency workgroup to focus on outreach, data
sharing, compliance and increasing service accessibility for nontraditional workers.
NONTRADITIONAL WORKER STUDY 26
Appendix A: State and Federal Definitions by Worker
Classification67
Classification Agency Definition
Self Employed
Generally, you are self-employed if any of the following apply:
You carry on a trade or business as a sole proprietor or an independent
IRS
contractor.
DOR
You are a member of a partnership that carries on a trade or business.
You are otherwise in business for yourself (including a part-time business)
Workers who earn income directly from one's own business, trade, or
US DOL
profession rather than as a specified salary or wages from an employer.
Self-Employed
LNI See: LNI's definition of independent contractors
ESD See: ESD's definition of independent contractors.
Those persons who work for profit or fees in their own business, profession,
trade, or farm. Self-employed typically incorporate their businesses in order to
BLS receive traditional benefits of the corporate structure, including limited liability,
tax considerations, and enhanced opportunity to raise capital through the sale
of stocks and bonds.
Size standards vary by industry, and are generally based on the number of
IRS
employees or the amount of annual receipts the business has. Generally, small
DOR
businesses are those with less than 500 employees.
A small business could be defined as business with a maximum of 250
US DOL employees or a maximum of 1,500 employees. They are privately owned
corporations, partnerships, or sole proprietorships.
Small Business
LNI No Definition
Owners
Employers determined to have one hundred fifty or fewer employees.
ESD1 Or
See: WAC 192-560-010 (1)
Employers determined to have one hundred fifty or fewer employees.
ESD2 Or
See: RCW 50A.24.010 (2)
67 ESD¹ - Definitions for ESD Unemployment Insurance Program.
ESD² - Definitions for ESD Paid Family Medical Leave Program.
NONTRADITIONAL WORKER STUDY 27
Classification Agency Definition
A small business is defined as a firm with fewer than 500 employees in all of
BLS the industries or business locations in which the firm operates (all of the firm’s
establishments combined).
A sole proprietor is someone who owns an unincorporated business by himself
or herself. You also are a sole proprietor for income tax purposes if you are an
IRS
individual and the sole member of a domestic limited liability company (LLC)
unless you elect to have the LLC treated as a corporation.
A Sole Proprietorship is one individual or married couple in business alone.
Sole proprietorships are the most common form of business
DOR
structure. However, the business owner is personally liable for all debts
Sole-Proprietorships incurred by the business.
US DOL No Definition
LNI See: LNI's definition of self-employed.
ESD See: ESD's definition of self-employed.
BLS See: BLS' definition of self-employed worker.
The sole member of a domestic limited liability company (LLC) unless you
elect to have the LLC treated as a corporation. Generally, for income tax
IRS
purposes, a single-member LLC is disregarded as an entity separate from its
DOR
owner and reports its income and deductions on its owner's federal income tax
return.
US DOL No Definition
Sole-Owner
LLCs
LNI See: LNI's definition of self-employed.
ESD See: ESD's definition of self-employed.
BLS See: BLS' definition of self-employed worker.
NONTRADITIONAL WORKER STUDY 28
Classification Agency Definition
Workers who are identified as independent contractors, independent
consultants, or freelance workers, regardless of whether they are self-
BLS
employed or wage and salary workers. Independent contractors are a subset of
contingent workers.
Contingent Workforce
See: IRS Common-Law Test, IRS Right to Control Test, IRS Reasonable Basis
Test-or-The general rule is that an individual is an independent contractor if the
IRSDOR
payer has the right to control or direct only the result of the work and not what
will be done and how it will be done.
See Economic Realities Test
-or-
USDOL The general rule is that an individual is an independent contractor if the payer
Independent has the right to control or direct only the result of the work and not what will be
contractor done and how it will be done.
ESD¹ See: RCW 50.04.140
ESD² See: RCW 50A.05.010(8)(b)
LNI Independent Contractor Test(s)
LNI -or-
RCW 51.08.181 & 51.08.195
IRS Freelancers are defined similar to independent contractors or self-employed
DOR workers. They control the work that they do for an employer.
These workers perform temporary, flexible jobs and are paid per service
provided or task completed. They are not hourly or salaried employees.
US DOL
Workers doing business on a project or freelance basis will typically be
Freelancers classified as independent contractors rather than employees.
LNI No Definition
ESD See: ESD's definition of independent contractor.
BLS See: BLS' definition of independent contractor.
NONTRADITIONAL WORKER STUDY 29
Classification Agency Definition
On-demand work is certain activity you do to earn income, often mediated
IRS
through a digital platform, such as websites, apps, or online marketplaces. All
DOR
tax obligations rest with the individual.
US DOL See: US DOL's definition of independent contractor.
On-Demand Workers
LNI No Definition
ESD No Definition
BLS Workers who perform short-term jobs provided through online labor platforms.
Gig work is certain activity you do to earn income, often mediated through a
IRS
digital platform, such as websites, apps, or online marketplaces. All tax
DOR
obligations rest with the individual.
US DOL See: US DOL's definition of independent contractor.
Gig-Workers LNI No Definition
ESD No Definition
The BLS does not have a definition for this term, and there is no generally
accepted definition among researchers. Many definitions of gig workers
BLS
include people in temporary jobs, independent contractors, on-call workers, and
day laborers who find work through electronically mediated sources.
Work that does not promote or advance the business of the employer. "Casual
IRS Labor" has no real employment tax significance. Work that is performed is
DOR subject to common-law definition of an employee or independent contractor to
determine tax liability.
Employment may be considered casual in character if the person is employed
only occasionally, at comparatively long and irregular intervals, for limited and
US DOL
temporary purposes, or if the hiring in each instance is a matter of special
engagement
Casual Laborer
Subject to independent contractor tests to determine relationship between
LNI
worker and employer; casual labor is intermittent and/or sporadic in duration.
See: RCW 50.04.270
ESD "…Labor not in the course of the employer's trade or business (labor which
does not promote or advance the trade or business of the employer)."
BLS No Definition
NONTRADITIONAL WORKER STUDY 30
Classification Agency Definition
"Day Labor" has no real employment tax significance. Work that is performed is
IRS
subject to common-law definition of an employee or independent contractor to
DOR
determine which party has tax liability.
FLSA covered employers must pay day laborers at least the applicable
US DOL minimum wage for all hours worked regardless of whether the worker is paid
by the hour, the day, or at a piece rate.
Day Laborers
Considered an employee, even though duration of employment may not be set
LNI
or defined schedule.
ESD No Definition
A worker who finds work by waiting at a place where an employer picks up
BLS
people to do daily jobs.
USDOL The H-2A temporary agricultural program establishes a means for agricultural
IRS employers who anticipate a shortage of domestic workers to bring
DOR nonimmigrant foreign workers to the U.S. to perform agricultural labor or
LNI services of a temporary or seasonal nature.
The H-2A program allows U.S. employers or U.S. agents who meet specific
BLS regulatory requirements to bring foreign nationals to the United States to fill
Agricultural Migrant temporary agricultural jobs.
Worker
Foreign workers who are hired through the Temporary Agricultural Foreign
ESD¹ Labor Certification Program, or the H-2A program
ESD² No Definition
IRS
DOR
No Definition
ESD¹
LNI
On-Call Workers ESD² For Paid Family and Medical Leave Program See: WAC 192-540-040(12)(b)
Workers who are called to work only as needed, although they can be
BLS
scheduled to work for several days or weeks in a row.
NONTRADITIONAL WORKER STUDY 31
Classification Agency Definition
When working through a staffing agency, [a worker is] considered an employee
IRS of the staffing agency. The business [an individual is] working for is considered
DOR a client of the staffing agency, and [the worker is] providing services to the
client.
Workers who are paid by a temporary help agency, whether or not their job is
BLS
temporary
Temporary Help
Agency Workers
ESD²LNI No Definition
ESD¹ See: RCW 50.04.245(4)(a) - "Temporary staffing services company"
USDOL Same as US DOL definition of employee under the FLSA.
When working through a contract agency, [a worker is] considered an employee
IRS of the contract agency. The business [an individual is] working for is
DOR considered a client of the contract agency, and [the worker is] providing
services to the client.
Workers who are employed by a company that provides them or their services
BLS to others under contract, are usually assigned to only one customer, and
Workers Provided by usually work at the customer's worksite.
Contract Firms
USDOL Same as US DOL definition of employee under the FLSA.
ESD¹ See: RCW 50.04.245(4)(b) - "Services Referral Agency"
LNI
No Definition
ESD²
"Seasonal Work" has no real employment tax significance. Work that is
IRS
performed is subject to common-law definition of an employee or independent
DOR
contractor to determine tax liability.
Workers who perform work that is dependent on the time of year for specific
US DOL
business operations or availability of work.
Seasonal Workers
LNI No Definition
ESD No Definition
A worker who is filling a seasonal job that is only available during certain times
BLS
of the year.
Employees
NONTRADITIONAL WORKER STUDY 32
Classification Agency Definition
Common Under common-law rules, anyone who performs services for you is your
Law employee if you can control what will be done and how it will be done. This is
DOR so even when you give the employee freedom of action. What matters is that
IRS you have the right to control the details of how the services are performed
[Determined by] the underlying economic reality of the situation and whether
the individual is economically dependent on the employer. In general, an
USDOL
employee...is one who "follows the usual path of an employee" and is
Employee dependent on the business that [they] serve.
ESD¹ See: RCW 50.04.100
ESD² For Paid Family and Medical Leave Program See: RCW 50A.05.010(5)
Common-law definition applies.
LNI
See: RCW 51.08.180 & 51.08.185
IRS
DOR
USDOL
No Definition
ESD¹
ESD²
LNI
Wage and Salary
Earner
Workers who receive wages, salaries, commissions, tips, payment in kind, or
BLS piece rates. The group includes employees in both the private and public
sectors. Can be used as a surrogate for this type of workforce arrangement
An employee is generally guaranteed a regular wage amount for an hourly,
IRS weekly, or other period of time. This usually indicates that a worker is an
employee, even when the wage or salary is supplemented by a commission.
Commission Sales
Workers
Commissions are payments for hours worked and must be included in the
regular rate. This is true regardless of whether the commission is the sole
US DOL
source of the employee's compensation or is paid in addition to a guaranteed
salary or hourly rate, or on some other basis...
NONTRADITIONAL WORKER STUDY 33
Classification Agency Definition
LNI See: LNI's definition of employees.
ESD See: ESD's definition of employees.
Those who work on commission, usually earning a base salary and a
BLS
percentage of total sales that they make.
Other Definitions
Resident aliens; nonresident aliens; dual status aliens; foreign students; and
IRSDOR other categories, including athletes and entertainers, agricultural workers, au
pairs, dual status aliens, and expatriates.
The foreign born include legally-admitted immigrants, refugees, temporary
BLS residents such as students and temporary workers, and undocumented
immigrants.
The Immigration and Nationality Act (INA) establishes...nonimmigrant
classification...‘‘having a residence in a foreign country which he has no
USDOL intention of abandoning who is coming temporarily to the United States to
perform . . . temporary service or labor if unemployed persons capable of
Foreign Born performing such service or labor cannot be found in this country.’’
Workers
See:
ESD¹ RCW 50.04.205 - "certain nonresident aliens"
RCW 50.20.098 - "undocumented aliens"
Nonimmigrant worker - Those who have authorization to work in the U.S.
through petition for visa status by the U.S. Citizenship and Immigration Service.
LNI
Undocumented Worker - Those who do not have authorization to work in the
U.S. through petition for visa status by the U.S. Citizenship and Immigration
Service.
ESD² No Definition
NONTRADITIONAL WORKER STUDY 34
Appendix B: Summary of Agency Contractors’ Tests
Personal Labor Test (White Test) (LNI)
Test Elements
A–1. Do they hire crew of their own or are they bringing other employees?
A–2. Or, are they bringing heavy or costly specialized equipment?
Independent Contractor 6 & 7-Part Test (LNI)
Test Elements
B–1. Are they free from your supervision, direction or control?
B–2. Is the individual’s business different and separate from your own?
B–2(a). Is the individual’s service “outside the usual course of business,” or in other words, does the contractor do
something different from what you do?
B–2(b). Is the individual’s service being performed “outside of all of the places of business,” or in other words, does
the contractor perform the service away from where you perform your services?
B–3. Does the individual have an established independent business that existed before you brought them on — OR — does
the individual have a principal place of business that qualifies for an IRS business deduction?
B–3(a). Do you have evidence to demonstrate that the individual has an established business?
B–3(b). Does the individual have a principal place of business that qualifies for an IRS business deduction? Do you
have evidence to demonstrate it?
B–4. Is the individual responsible for filing a schedule of expenses with the IRS, such as would be part of a business tax
return?
B–5. Does the individual have all required registrations and licenses for their business?
B–6. Does the individual maintain his/her own set of books and records that reflect all income and expenses of the
business?
B–7. This question is for construction contractors only: Is the individual a properly registered contractor?
Independent Contractor/All Other Industries Test (ESD)
Test Elements
1. The individual is free from direction and control over the performance of the service; and
2. The service is either performed:
a. Outside of the usual course of business for which the service is performed, or
b. Outside of all the places of business of the enterprise for which the service is performed; and
3. The individual is customarily engaged in an independently established trade, occupation, profession or business of the
same nature as that involved in service contract.
NONTRADITIONAL WORKER STUDY 35
Independent Contractor (ESD)
Test Elements
1. The individual is free from direction and control over the performance of the service; and
2. The service is either performed:
2.a. Outside of the usual course of business for which the service is performed, or
2.b. Outside of all the places of business of the enterprise for which the service is performed; or
2.c. The individual has a principal place of business and is responsible for the costs; and
3. The individual:
3.a. Is customarily engaged in an independently established trade, occupation, profession, or business of the same
nature as that involved in the service contract, or
3.b. Has a principal place of business that is eligible for a federal income tax business deduction; and
4. On the effective date of the contract of service, the individual is responsible for filing a schedule of expenses with the
Internal Revenue Service; and
5. On the effective date of the contract or within a reasonable period after the effective date of the contract, the individual
has an:
5.a. Active account with the Department of Revenue,
5.b. Active account with any other state agency, and
5.c. A Unified Business Identifier (UBI) number and
6. On the effective date of contract of service, the individual is maintaining a separate set of books or records that reflect
all items of income and expenses of the business that the individual is conducting; and
Independent Contractor/Construction Test (ESD)
Test Elements
1. The individual is free from direction and control over the performance of the service; and
2. The service is either performed:
2.a. Outside of the usual course of business for which the service is performed, or
2.b. Outside of all the places of business of the enterprise for which the service is performed; or
2.c. The individual has a principal place of business and is responsible for the costs; and
3. The individual:
3.a. Is customarily engaged in an independently established trade, occupation, profession, or business of the same
nature as that involved in the service contract, or
3.b. Has a principal place of business that is eligible for a federal income tax business deduction; and
4. On the effective date of the contract of service, the individual is responsible for filing a schedule of expenses with the
Internal Revenue Service; and
5. On the effective date of the contract or within a reasonable period after the effective date of the contract, the individual
has an:
NONTRADITIONAL WORKER STUDY 36
5.a. Active account with the Department of Revenue,
5.b. Active account with any other state agency, and
5.c. A Unified Business Identifier (UBI) number and
6. On the effective date of contract of service, the individual is maintaining a separate set of books or records that reflect
all items of income and expenses of the business that the individual is conducting; and
7. On the effective date of the contract, the individual has a valid contractor registration under RCW 18.27 or an electrical
contractor license under RCW 19.28 if the work requires a registration or license.
Economic Realities Test (US Dept. of Labor, Fair Labor Standards Act
(FLSA))
Test Elements
Is the Work an Integral Part of the Employer’s Business?
Does the Worker’s Managerial Skill Affect the Worker’s Opportunity for Profit or Loss?
How Does the Worker’s Relative Investment Compare to the Employer’s Investment?
Does the Work Performed Require Special Skill and Initiative?
Is the Relationship between the Worker and the Employer Permanent or Indefinite?
What are the nature and degree of control the company exercises over the worker?
Common Law Rules (Three Categories Test (IRS))
Test Elements
Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or
her job?
Financial: Are the business aspects of the worker’s job controlled by the payer? (These include things like how worker is
paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay,
etc.)? Will the relationship continue and is the work performed a key aspect of the business?
IRS Common Law Definition (Right to Control Test)
Test Elements
Amount of training. Requesting workers to undergo company-provided training suggests an employment relationship
since the company is directing the methods by which work is accomplished.
Degree of business integration. Workers whose services are integrated into business operations or significantly affect
business success are likely to be considered employees.
Extent of personal services. Companies that insist on a particular person performing the work assert a degree of control
that suggests an employment relationship. In contrast, independent contractors typically are free to assign work to
anyone.
Control of assistants. If a company hires, supervises, and pays a worker's assistants, this control indicates a possible
employment relationship. If the worker retains control over hiring, supervising, and paying helpers, this arrangement
suggests an independent contractor relationship.
NONTRADITIONAL WORKER STUDY 37
Continuity of relationship. A continuous relationship between a company and a worker indicates a possible employment
relationship. However, an independent 1 contractor arrangement can involve an ongoing relationship for multiple,
sequential projects.
Flexibility of schedule. People whose hours or days of work are dictated by a company are apt to qualify as its employees.
Demands for full-time work. Full-time work gives a company control over most of a person's time, which supports a
finding of an employment relationship.
Need for on-site services. Requiring someone to work on company premises— particularly if the work can be performed
elsewhere—indicates a possible employment relationship.
Sequence of work. If a company requires work to be performed in specific order or sequence, this control suggests an
employment relationship.
Requirements for reports. If a worker regularly must provide written or oral reports on the status of a project, this
arrangement indicates a possible employment relationship.
Method of payment. Hourly, weekly, or monthly pay schedules are characteristic of employment relationships, unless the
payments simply are a convenient way of distributing a lump-sum fee. Payment on commission or project completion is
more characteristic of independent contractor relationships.
Payment of business or travel expenses. Independent contractors typically bear the cost of travel or business expenses,
and most contractors set their fees high enough to cover these costs. Direct reimbursement of travel and other business
costs by a company suggests an employment relationship.
Provision of tools and materials. Workers who perform most of their work using company-provided equipment, tools, and
materials are more likely to be considered employees. Work largely done using independently obtained supplies or tools
supports an independent contractor finding.
Investment in facilities. Independent contractors typically invest in and maintain their own work facilities. In contrast,
most employees rely on their employer to provide work facilities.
Realization of profit or loss. Workers who receive predetermined earnings and have little chance to realize significant
profit or loss through their work generally are employees.
IRS Reasonable Basis Test
Test Elements
A court ruling in favor of treating workers in similar circumstances as non-employees; a ruling by the IRS (usually a
Revenue Ruling) stating that similar workers are not employees subject to employment taxes;
An IRS Technical Advice Memorandum or Private Letter Ruling issued to your company, indicating that the particular
worker isn't an employee;
A past IRS payroll audit that didn't find workers in similar positions at your company to be employees;
A longstanding, widely recognized practice in your industry of treating similar workers as independent contractors.
Employment ABC Test (Various States, Legal Precedent)
Test Elements
A. Such individual has been and will continue to be free from control or direction over the performance of such service,
both under his or her contract of service and in fact.
B. Such service is either outside the usual course of business for which such service is performed, or that such service is
performed outside of all the places of business of the enterprises for which such service is performed.
NONTRADITIONAL WORKER STUDY 38
C. Such individual is customarily engaged in an independently established trade, occupation, profession, or business, of
the same nature as that involved in the contract of service.
NONTRADITIONAL WORKER STUDY 39
Appendix C: Data Collection Processes
Among the most fundamental documents used to provide social safety net benefits are workers' individual tax
returns. Agencies rely on these tax documents to identify if a worker is within the threshold for benefits
eligibility. Tax returns help illustrate the relationship of the worker with their payer or employer, such as through
paystubs, W-2s, 1099-MISCs, 1040-SRs, and 1040-C returns. The type of tax document also shows if a person
pays all state and federal taxes themselves or if the employer partially pays state and federal taxes.
State agencies use tax returns in the following ways:
Agency Tax Report Document Use
HCA Uses tax returns and verifiable income statements to determine Apple Health eligibility
DCYF Uses tax returns and verifiable income statements to determine childcare subsidy eligibility
• Unemployment insurance from ESD requires quarterly reports of gross wages from employers to
help determine if a worker is eligible for benefits.
• If an employer does not file quarterly reports, ESD will need verifiable income statements from the
ESD
worker to determine benefit eligibility.
• Paid Medical and Family Leave requires quarterly premium payments that depend on gross annual
wages to maintain benefits.
Workers’ compensation requires premium payments that depend on risk assessment by industry to
LNI
maintain benefits eligibility.
Requires Federal Insurance Contributions Act (FICA) tax payments into the Administration’s credits
SSA
system for a certain amount of a person’s work history
A worker's relationship to their employer, and which party is responsible for employment-related taxes, are
reference points that could identify nontraditional workers to determine benefits eligibility. However, agency
representatives observed that Washington data systems do not capture the information needed to determine
whether a worker is in a nontraditional work arrangement and receives social safety net benefits. At best, the
state’s administrative data can describe only the participation of self-employed workers within the benefit
systems. This is due to:
Program requirements established through federal guidelines
Limited agency resources to broaden information gathering
Data-privacy and security controls which differ between state and federal agencies
Limitations on data-sharing agreements
Outreach methods that do not identify members of nontraditional workforce arrangements
A combination of these issues.
The confluence of these factors restricts the processes that agencies can use to identify those who has
limited access to state benefits, as well as the best way deliver benefits to them. If agencies that had access
NONTRADITIONAL WORKER STUDY 40
to data that could identify nontraditional workers were given legislative authority to record and track
nontraditional workers, it could assist in benefit outreach and benefit delivery methods.
As it currently stands, one of the only ways to identify workers in nontraditional workforce arrangements within
the state's administrative data is by looking at the tax returns associated with nontraditional work. For the
purposes of this report, DOR's Research and Fiscal Analysis Division provided tabulation of 1099-MISCs and
1040 Schedule Cs by matching the nonemployee compensation amount from the 1099-MISC data and
corresponding Social Security number, to the Form 1040 dataset. These returns were from the 2017 tax year
and stratified by county. DOR's data was used to assess where matched filers were located and their
prevalence to all individual returns within each county, as displayed in the following map. The 2019
Independent Contractor Study determined that in May 2017, a lower-bound estimate of independent
contractors in the state in May 2017 was 320,030, or 9.1%, of Washington’s workforce.68 Calculating the
prevalence of nontraditional workers with tax returns can create a point-in-time approximation, not a complete
picture of the nontraditional workforce. Agencies, and their access to applicable data, could create a more
complete illustration if they were directed to capture pertinent data when determining benefit eligibility.
To further explore state tax data, should the Legislature request deeper analysis, this report recommends that
DOR be funded to conduct the research, as there are legal state and federal limitations as to what data can be
shared with other state agencies and for research purposes.
Incorporating the state's recording instruments into strategies to assist nontraditional workers has its own set
of challenges. While tax documents can tell agencies specific information about a worker, agencies contacted
during the report’s roundtable meetings discussed and acknowledged that nontraditional workers struggle to
68 Department of Commerce, "Independent Contractor Study," (2019), https://www.commerce.wa.gov/wp-
content/uploads/2019/07/Leg-Report-Independent-Contractor-Study-2019.pdf
NONTRADITIONAL WORKER STUDY 41
provide these documents, at the point of benefits eligibility determination. Jason Ramynke from DCYF stated
that, "documentation is our biggest challenge in providing services," to nontraditional workers. Representatives
from the HCA expressed similar struggles when providing services for Apple Health. Tax returns could provide
an approximate number of workers in nontraditional roles as well as who is using state services, but additional
data capturing methods are necessary to get the full picture. A collaborative interagency approach could
determine what works well, what does not, and how to combine effective recording methods to monitor the
conditions of nontraditional workers accessing state social safety net benefits.
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