Washington Independent Contractor Agreement Template
Washington gives you two ways out of employment for unemployment insurance, and the easier looking one asks for a tax filing, a state revenue account, and a separate set of books.
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Introduction
An Independent Contractor Agreement is a contract between a business and a self-employed worker covering scope, payment, ownership of the work product, and how the engagement ends. Washington does not prescribe clause wording, but it does something more consequential: several elements of its classification tests are expressly conditioned on what the contract says, not merely on how the parties behave. Freedom from control, responsibility for the costs of the principal place of business, and responsibility for filing a schedule of expenses all have to be true both under the contract of service and in fact. A contract that is silent on cost allocation fails that prong no matter how the work is actually run. On top of that, RCW 50.04.140 holds two separate routes out of employment rather than one. The first is a conventional ABC test. The second softens the second and third prongs but bolts on three administrative elements that have nothing to do with the day to day relationship, and construction and electrical work gets its own section with a seventh element on top of that. Workers' compensation mirrors the second route element for element, and wage and hour runs on something else entirely.
Key Things to Know
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The starting point is deemed employment. RCW 50.04.140 provides that services performed by an individual for remuneration are deemed to be employment unless and until it is shown to the satisfaction of the commissioner that a full test is met. Every element is joined by and, so the elements are conjunctive, and the entire burden sits on the hiring business rather than on the worker or the agency.
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There are two routes, not one. RCW 50.04.140(1) is the classic ABC test: freedom from control, service either outside the usual course of business or performed off all of the hiring party's premises, and a customarily independently established trade of the same nature. RCW 50.04.140(2) is a separate alternative that softens the second and third prongs, allowing the worker instead to bear the costs of the principal place of business and to have a principal place of business eligible for a federal business deduction.
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The softer route is not the easier route. The alternative in RCW 50.04.140(2) adds three administrative elements that the plain ABC test does not contain: the worker must be responsible for filing a schedule of expenses with the Internal Revenue Service at the next applicable filing period, must have established an account with the Department of Revenue and received a unified business identifier number from the state of Washington, and must be maintaining a separate set of books or records reflecting all items of income and expense of the business. Taken together they make route two stricter overall than any standard ABC test.
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Construction and electrical work has its own section. RCW 50.04.145 applies where the services require registration under chapter 18.27 RCW or licensing under chapter 19.28 RCW, and its seventh element requires that on the effective date of the contract of service the individual has a valid contractor registration or an electrical contractor license. It also tightens the principal place of business requirement, which must be other than one furnished by the employer for which the business has contracted to furnish services.
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Workers' compensation mirrors the six part alternative element for element. RCW 51.08.195 sets out the same six conditions as RCW 50.04.140(2), and RCW 51.08.181 is the trades variant whose seventh element accepts a contractor registration under chapter 18.27 RCW, a plumbing contractor license under chapter 18.106 RCW, or an electrical contractor license under chapter 19.28 RCW. The workers' compensation exception is the unemployment statute's harder alternative, not its plain ABC test.
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Washington's personal labor doctrine catches sole operators. RCW 51.08.180(1) defines worker to include every person working under an independent contract the essence of which is his or her personal labor. A one person contractor who would be an obvious contractor in ordinary commercial usage is a covered worker for premium purposes unless every element of RCW 51.08.195 or RCW 51.08.181 is satisfied.
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Wage and hour runs on a different test again. In Anfinson v. FedEx Ground Package System, 174 Wn.2d 851 (2012), the Washington Supreme Court held that the definition of employee in RCW 49.46.010 incorporates the economic dependence test developed by the federal courts under the Fair Labor Standards Act, and expressly rejected the right to control test for Minimum Wage Act purposes on the ground that control serves a different purpose. A worker can therefore be a contractor for wage purposes and a covered worker for premiums, or the reverse.
Key decisions before you file
Before you file a Independent Contractor Agreement in Washington, a few decisions shape the document: which option to choose and what each one means. The Independent Contractor Agreement guide walks through them.
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Washington Requirements for Independent Contractor Agreement
Services performed for remuneration are deemed to be employment unless and until it is shown to the satisfaction of the commissioner that the individual is free from control or direction over the performance of the service, both under the contract of service and in fact; that the service is either outside the usual course of business or performed outside all of the places of business of the enterprise; and that the 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.
As a separate alternative, the second prong is satisfied where the individual is responsible, both under the contract and in fact, for the costs of the principal place of business from which the service is performed, and the third prong is satisfied where the individual has a principal place of business eligible for a business deduction for federal income tax purposes. In exchange the route adds three conditions: responsibility for filing an Internal Revenue Service schedule of expenses at the next applicable filing period, a Department of Revenue account with a Washington unified business identifier number, and a separate set of books or records.
For services requiring registration under chapter 18.27 RCW or licensing under chapter 19.28 RCW, RCW 50.04.145 governs and adds a seventh element: on the effective date of the contract of service, the individual has a valid contractor registration pursuant to chapter 18.27 RCW or an electrical contractor license pursuant to chapter 19.28 RCW. The section also requires that the individual's principal place of business be other than that furnished by the employer for which the business has contracted to furnish services.
As an exception to the definitions of employer in RCW 51.08.070 and worker in RCW 51.08.180, services do not constitute employment where all six conditions are shown: freedom from control both under the contract of service and in fact; the service outside the usual course of business, off all premises, or with the individual bearing the costs of the principal place of business; an independently established trade or a deductible principal place of business; an Internal Revenue Service schedule of expenses; a Department of Revenue account and unified business identifier number; and a separate set of books.
Where the work requires registration or licensing in the building trades, RCW 51.08.181 supplies a seventh element requiring a valid contractor registration pursuant to chapter 18.27 RCW, a plumbing contractor license pursuant to chapter 18.106 RCW, or an electrical contractor license pursuant to chapter 19.28 RCW. Record the registration or license number in the agreement and confirm it remains valid for the duration of the engagement, since the element is tested as of the effective date of the contract of service.
The definition of worker reaches every person working under an independent contract the essence of which is his or her personal labor. A sole operator with no employees can therefore be a covered worker for workers' compensation purposes despite being an independent contractor in ordinary commercial usage, unless every element of RCW 51.08.195 or RCW 51.08.181 is satisfied. This is a common source of unexpected premium assessments.
In Anfinson v. FedEx Ground Package System, 174 Wn.2d 851 (2012), the Washington Supreme Court held that the definition of employee in RCW 49.46.010 incorporates the economic dependence test developed by the federal courts under the Fair Labor Standards Act, asking whether as a matter of economic reality the worker is economically dependent upon the alleged employer or is instead in business for himself. The court expressly declined to use the right to control test for Minimum Wage Act purposes.
Several elements are conditioned on the agreement itself rather than on conduct alone. Freedom from control under RCW 50.04.140(1)(a) and (2)(a) and RCW 51.08.195(1), responsibility for the costs of the principal place of business under RCW 50.04.140(2)(b) and RCW 51.08.195(2), and responsibility for filing a schedule of expenses under RCW 50.04.140(2)(d) and RCW 51.08.195(4) must each hold both under the contract and in fact, and other conditions are measured on the effective date of the contract of service.
Legislation enacted in 2022 and amended in 2023 gives transportation network company drivers the same rights and obligations of a worker during passenger platform time and dispatch platform time. Platform operators should apply those provisions rather than the general six part analysis in RCW 51.08.195 when assessing workers' compensation obligations for drivers.
Frequently Asked Questions
Washington does not dictate clause wording, but several statutory elements are expressly conditioned on the contract itself. Freedom from control, responsibility for the costs of the principal place of business, and responsibility for filing a schedule of expenses must each be established both under the contract of service and in fact, under RCW 50.04.140 and RCW 51.08.195. Other elements are pinned to the effective date of the contract of service, which presupposes a dated, signed agreement.
For unemployment insurance it offers two options. RCW 50.04.140(1) is a conventional ABC test: freedom from control, service outside the usual course of business or performed off all of the hiring party's premises, and a customarily independently established trade. RCW 50.04.140(2) is a separate six part alternative that relaxes the second and third prongs but requires an Internal Revenue Service schedule of expenses, a Department of Revenue account with a unified business identifier number, and a separate set of books.
It depends on the facts of the engagement. The plain ABC test at RCW 50.04.140(1) is harder on the second prong because it has no allowance for a worker who bears the costs of the principal place of business. The alternative at RCW 50.04.140(2) opens that door but adds three administrative conditions the worker must actually have in place. Where the worker already runs a registered business with its own books and state accounts, the alternative is straightforward. Where the worker does not, the plain test is the only realistic path.
It is the registration number the state of Washington issues to a business. Under RCW 50.04.140(2)(e) and RCW 51.08.195(5) the worker must have established an account with the Department of Revenue, and other state agencies as required in the particular case, for the payment of all state taxes normally paid by employers and businesses, and must have registered for and received a unified business identifier number. Without it the six part alternative fails, so it is worth recording the number in the agreement and verifying it.
Yes, and it lives in its own section. RCW 50.04.145 applies to services requiring registration under chapter 18.27 RCW or licensing under chapter 19.28 RCW and adds a seventh element: a valid contractor registration or electrical contractor license on the effective date of the contract of service. For workers' compensation, RCW 51.08.181 adds the equivalent element and also accepts a plumbing contractor license under chapter 18.106 RCW. Letting a registration lapse mid engagement puts the element at risk.
It applies the harder of the two unemployment routes. RCW 51.08.195 sets out the same six conditions as the alternative in RCW 50.04.140(2), element for element, so a business that satisfies only the plain ABC test at RCW 50.04.140(1) has not thereby satisfied the workers' compensation exception. RCW 51.08.180(1) also sweeps in anyone working under an independent contract the essence of which is his or her personal labor, which catches many sole operators.
No. Minimum wage and overtime status is decided under RCW 49.46.010 by the federal economic dependence test, which the Washington Supreme Court adopted in Anfinson v. FedEx Ground Package System, 174 Wn.2d 851 (2012). The court reasoned that the right to control test exists to limit liability for another's torts while the Minimum Wage Act has a remedial purpose, and refused to import control into the wage analysis. The two questions are answered by different standards and can come out differently.
There is no general written contract requirement and no prescribed clause text. In practice a written, dated agreement is close to unavoidable, because the statutes ask what is true under the contract of service and fix several elements to its effective date. A purely oral arrangement leaves nothing to point to on the control prong, on cost allocation, or on the timing conditions.