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Capitol Hill Community Post | Run- DO NOT WALK to Save Small Business

Washington State legislature aims to dramatically impact your business, income or access to affordable services

From D’Arcy Harrison Co-Owner of Emerson Salon

Apparently, state politicians feel small businesses need to add to their already high costs while simultaneously heaping on new restrictions that severely limit their business freedoms. If you are a big company, corporation, organization or union you hire a a lobbyist to speak on your behalf to help protect your legal interests….

—- How do sole proprietors or independent contractors oppose dangerous legislation? They don’t have high paid lobbyists going to Olympia daily to battle harmful bills before they become law. They have to make time to communicate with community members and legislators to be heard. This is what is happening all over WA State in droves. Grass roots activism against SB 5326 saw over 1300 small business cosmetologists descend on Olympia to battle back decimation of booth rent cosmetology in WA state. This explosion of activity through in person protest has now IGNITED counter efforts to 4 NEW bills in 5326’s wake.

Even with tremendous online & in person outreach — there seems to be snowy silence by news outlets in regards to Bills 1601, 1515, 5690 and 5513. Their detrimental impact to most independent contractors and small business owners will number in the 100’s of thousands (if not more) who will be effected if these bills hit the floor then pass into law. In 2018, similar legislation was proposed & passed in California (see Dynamex ruling) has altered that states economic landscape forever with businesses closing and people going into debt to adjust to new laws. The legislative efforts are meant to supposedly prevent “an un-even playing field,” for businesses and to end exploitation and misclassification of workers. However valiant that goal may be…..

All four of these bills redefine what an independent contractor is. The state Democrats sponsoring the bills have decided they want a NEW definition called,”intermediary employee,” that creates more questions than clarification regarding service providers. This term would highlight those that do not work for a traditional employer who customarily pays into workers’ Social Security and WA state safety nets (L&I, workers comp and unemployment insurance).) Their 7 point test to determine worker status would be STRICTER than the federal “ABC,” test. The aim with these bills would be to MANDATE those intermediary employees pay for L&I and Unemployment Insurance to create “portable benefits,” that they could in turn “bring with them” regardless of who has contracted their services. Currently, small business owners can opt into L&I however most opt for private providers from the health insurance exchange or companies like AFLAC. If that is not bad enough, 5690 and 1601 introduce mandated service pricing/base pay determined by an unbalanced and undemocratically appointed,”Wage Board,”that could inherently drive up the consumer’s cost.

One of the most concerning changes to many sole proprietors is the elimination of shared coworking spaces among colleagues. “The labor or service is outside the usual course of business for which the labor or service is performed.” That portion of all 4 bills will make shared space among industry colleagues an illegal business practice. Successful business models inside these shared spaces can include realtors, massage therapists, tattoo artist, barbers, cosmetologists, estheticians, IT specialists, Graphic designers, doctors ……essentially working with or without a contract or some sort of documentation as to the leasing relationship of the sole proprietor. It currently stands ambiguous whether establishing separate business entities would create relief from these new stipulations. As in most cases, laws are written vaguely and therefore allow courts to widely interpret at will to penalize innocent small businesses for the slightest infraction.

Cecilia Fisher (owner of Slate Salon & Spa in Edmonds, WA):

“I am a salon owner who went through the rigorous process of getting an SBA loan where I had to prove my business is solid and set up to be successful. Now, a potential law says that I can no longer work in my salon because I rent to professionals who also perform the same cosmetology services as myself. I have 21 booth renters and 6 employees. I have a 5-year lease left to fulfill. These bills will force me to close my business and default on my loan. I would lose my home and 27 people would lose their location to provide services.”

Her story is only but one. Imagine the impact of this across all groups inside the business community losing homes and careers. In short, independent contractors and small businesses are getting caught in the crossfire while our politicians wear angel costumes supposedly trying to “protect” employee rights….. and causing HAVOC to voters and the state economy in the process.

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