In January, 2019 Washington State Legislators introduced SB 5326 which essentially would have ended the business structure of booth rental by cosmetologists as small business owners. Prior to the hearing on Jan 28, the sponsors of the bill expanded the bill to also include barbers and removing the provision regarding a ban booth rental to fellow cosmetologists. When the time came for public hearing regarding SB5326, over 1300 cosmetologists and their supporters descended on Olympia to tell the Senate Labor & Commerce committee their opposition to the bill in its amended form.
The bill still aimed to remove an important tax classification as booth rental independent contractors and would have opened these small business owners to greater danger and risk through IRS tax audit.
Thankfully, the primary sponsor of SB5326 took the feedback and tabled the bill and vowed to not move forward.
Yet, there is still danger in the political waters UNFORTUNATELY…
The problem is that NEW bills had already been introduced that not only still jeopardized cosmetologist booth rental but now expanded to the entire “Gig Economy,” and all independent contractors that receive 1099’s for their work. Booth renters are independent contractors even though we are not “contracted” by our customers for work and are not “hired” by their landlord. The supposed goal of the bills is to end misclassification of workers and those treating people as employees but using independent contracting as an excuse not to pay benefits, health insurance or state safety nets for their employees.
Let’s dive into the 4 bills that will overtax small business in addition to adding extremely stringent rules, imposed pricing, and more….
SB5513 and HB1515:
will create a NEW test to determine employee vs. independent contractor and a new definition called “intermediary employee” and is currently unclear who that is meant to include. This test aims to be STRICTER than the federal “ABC,” test. The proposed NEW 7 point test would eliminate colleagues within the same industry whom co-work space. Examples: Booth rent cosmetologist who lease a chair from another cosmetologist. It is unclear if having entirely separate business entities is enough to satisfy exemption from these proposed restrictions.
SB 5690 and HB 1601:
would impose “wage board” base pricing which mandates small businesses be told by the state what to charge and/or pay. This could drive up service pricing across ALL industries. It is nearly impossible to predict every variable of a business or industry to make sure this “PRICE FIXING” is fair. Price fixing is also illegal according to federal (who appoints the board? the ratio of members outnumbers small business entrepeneurs)
All 4 bills:
- All 4 bills say you cannot co-work space/lease with industry colleagues (this could drive up the price of commercial real estate for stand alone small business (ex: salon suites, etc.) due to increased demand)
- All 4 Bills have huge penalties that are nearly impossible to defend against (its called joint and sever liability that could drag you into court even if you did not misclassify workers)
- All 4 bills set a NEW extremely limited standard/definition for independent contractor status
- All 4 bills make “intermediary employees” and/or independent contractors (including booth rental) pay into L&I, unemployment & workers comp even if they do not want to use those state safety nets
- All 4 bills would support elevated B&O tax on business gross
- All 4 bills could drive up the price of services if less sole proprietor providers are in business (in addition to imposed pricing)
FOR MORE DETAILS INSIDE THE BILLS, Look at this DOCUMENT
or go to https://apps.leg.wa.gov/billinfo/
For Contact info of Legislators: CLICK THIS LINK
OPPOSING: Association for Washington Business, NFIB.org, WA Retail Association, Cosmetologists of Washington United Facebook Group (over 6k members), WA Hospital Association, The Internet Association
SUPPORTING: SEIU 775 and other labor group
What can YOU do to support opposition?
WE HAVE TO MAKE OUR WA STATE VOICES HEARD BEFORE THE FEB 22 POLICY DEADLINE.
TELL EVERYONE YOU KNOW. SHARE IN EMAIL. SHARE ON SOCIAL MEDIA. TALK TO YOUR FRIENDS, FAMILY AND COWORKERS. Call and EMAIL district legislators and the sponsors of the bills. These bills effect cosmetologists, massage therapists, plumbers, real estate agents, truck drivers, app drivers/deliverypersons, doctors and the list goes on and on… and most importantly they WILL effect YOU! Whether we like it or not….
OPPOSE 5513, 1515, 1601 + 5690
>>>>> Call 1 800 562 6000 to leave a brief opposition message during regular business hours
>>>>> OR WRITE DISTRICT LEGISLATORS:
Follow these links to oppose these bills
https://app.leg.wa.gov/pbc/bill//5513
https://app.leg.wa.gov/pbc/bill//1515
https://app.leg.wa.gov/pbc/bill//5690
https://app.leg.wa.gov/pbc/bill//1601
YOU HAVE 3 District Legislators in your WA State District-
CLICK the link below TO FIND OUT WHO THEY ARE
https://app.leg.wa.gov/DistrictFinder/
WA State Legislative Districts
