Washington Independent Contractor Agreement
Create a Washington independent contractor agreement that accounts for the state's strict ABC and six-part classification tests (RCW 50.04.140; RCW 51.08.195) and Washington's evolving non-compete law (RCW 49.62).
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Legal Requirements in Washington
Worker classification for unemployment uses an ABC test plus, where the worker supplies no employees or equipment and for construction/electrical trades, a stricter six-part test (RCW 50.04.140).
Industrial-insurance (workers' comp) exemption requires satisfying all six parts of the test in RCW 51.08.195; failing any part makes the hiring party liable for L&I premiums and penalties.
Non-compete covenants against independent contractors are void unless the contractor's earnings exceed an annually indexed threshold ($317,147.09 for 2026) under RCW 49.62.030.
Construction contractors must be registered with L&I under the Contractor Registration Act (ch. 18.27 RCW); an unregistered contractor generally cannot sue to collect on the contract.
Contractors generally must register for a Unified Business Identifier (UBI) and pay Business & Occupation tax on gross receipts (ch. 82.04 RCW).
Within Seattle, the Independent Contractor Protections Ordinance (SMC 14.34) requires pre-work disclosures, itemized payment notices, and payment within 30 days of completion.
Key Statutes & Regulations
- Unemployment classification test, RCW 50.04.140 (2026)
- Industrial-insurance six-part test, RCW 51.08.195 (2026)
- Restrictions on non-competition covenants, RCW 49.62 (2026)
- Contractor Registration Act, ch. 18.27 RCW (2026)
- Business & Occupation tax, ch. 82.04 RCW (2026)
Common Pitfalls
- •Including a non-compete clause that is void because the contractor earns below the indexed RCW 49.62.030 threshold, or that will be unenforceable after the June 30, 2027 statewide ban.
- •Treating a worker as a contractor without confirming all six parts of the RCW 51.08.195 test, risking L&I premium liability.
- •Engaging an unregistered construction contractor, who then cannot legally enforce payment under ch. 18.27 RCW.
- •Ignoring Seattle's SMC 14.34 disclosure and 30-day payment rules for work performed in the city.
Local Terminology
- Six-part test
- The RCW 51.08.195 / 50.04.140 standard requiring, among other factors, that the worker be free from control, customarily engaged in an independent trade, and maintain a separate business with its own books.
- B&O tax
- Washington's Business & Occupation tax, a gross-receipts tax under ch. 82.04 RCW that the contractor pays on income earned in the state.
- UBI number
- The nine-digit Unified Business Identifier issued through Washington's Business Licensing Service that registers a contractor across multiple state agencies.
How Washington Differs
Washington applies one of the strictest classification regimes in the country: the six-part test under RCW 51.08.195 requires the contractor to maintain a separate, independently established business with its own books and IRS Schedule.
Non-compete clauses face a far higher contractor income floor ($317,147.09 for 2026) than the employee threshold, and a 2026 law (ESHB 1155) voids nearly all non-competes effective June 30, 2027.
The contractor, not the hiring party, bears Washington's B&O gross-receipts tax, which should be reflected in pricing.
Seattle imposes city-level freelance disclosure and timely-payment duties (SMC 14.34) that exceed any statewide requirement.
Unregistered construction contractors lose the right to sue for payment under RCW 18.27.080.
Frequently Asked Questions
How does Washington decide if a worker is a contractor?
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Washington uses an ABC test for unemployment (RCW 50.04.140) and a stricter six-part test for industrial insurance (RCW 51.08.195). For workers' comp exemption, all six parts must be met, including that the contractor maintains a separate, independently established business with its own books and IRS Schedule.
Are non-compete clauses enforceable against Washington contractors?
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Rarely. Under RCW 49.62.030, a non-compete against an independent contractor is void unless the contractor earns more than an annually indexed threshold, set at $317,147.09 for 2026. A 2026 law (ESHB 1155) goes further, voiding nearly all non-competes statewide effective June 30, 2027.
Does a Washington contractor pay B&O tax?
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Yes. Washington's Business & Occupation tax (ch. 82.04 RCW) is a gross-receipts tax owed by the contractor on income earned in the state, not by the hiring party. Independent contractors generally must register for a UBI number and remit B&O tax on their gross earnings.
Do Seattle contractors have extra protections?
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Yes. Seattle's Independent Contractor Protections Ordinance (SMC 14.34), effective September 1, 2022, requires hiring entities to give a pre-work disclosure of terms, itemized written notice at each payment, and payment within 30 days of completion when no other date is set. It is enforced by the Office of Labor Standards.
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