This bill adds a new section to chapter 39.12 RCW creating a procedure for the Department of Labor and Industries (L&I) to investigate potential independent contractor misclassification on public works projects. L&I must investigate when it receives a referral and three or more independent contractors are engaged at the same time to perform the same type of "covered finishing work" (defined in the bill as drywall, flooring, tiling, painting, and glazier and glasswork) on a public works project. The bill specifies who may refer an investigation to L&I: the public entity awarding the contract (state, county, municipality, or other political subdivision), any contractor or subcontractor on the project, any labor organization representing individuals performing the covered finishing work, or any individual performing that work. If L&I finds misclassification, the contractor or subcontractor that engaged the individual is subject to all applicable requirements, liabilities, and penalties under chapter 39.12 RCW, and L&I must make appropriate referrals under Titles 50 and 51 RCW. This is a new statutory provision added to chapter 39.12 RCW. The extracted text does not include the full statutory definition of "independent contractor" from RCW 39.12.100, does not provide the new section’s assigned number, and does not include effective dates, specific timelines, or the detailed procedures and penalty specifics from chapter 39.12 or Titles 50 and 51 RCW. The bill was read first on 02/04/26 and, per the extracted facts, passed the Senate on February 13, 2026 (Yeas 37, Nays 11) and passed the House on March 5, 2026 (Yeas 92, Nays 4).

If enacted, the rule would make it easier for the Department of Labor and Industries to open investigations whenever a contractor or subcontractor uses three or more people classified as independent contractors to do the same kind of finishing work (drywall, flooring, tiling, painting, or glass work) at the same time on a public works job, whenever a public owner, another contractor, a labor union, or a worker asks L&I to look into it. That will raise the likelihood that contractors and subcontractors who rely on independent-contractor arrangements for these trades will be examined and, if misclassification is found, be required to meet the full duties, liabilities and penalties spelled out in chapter 39.12 RCW and be referred under Titles 50 and 51 RCW. The biggest practical impacts fall on contractors and subcontractors, who face more investigation risk, potential financial liabilities and compliance costs, and on L&I, which will have new referral-driven investigative work to handle; public entities, unions, and individual workers gain a clear avenue to trigger reviews. Important details are missing here, however: the precise statutory definition of “independent contractor” (RCW 39.12.100), any effective date, and the specific procedures, timelines, and penalties from chapter 39.12 or Titles 50 and 51 are not included, so how quickly or severely these changes would play out is uncertain.