A Message from L&I's Small Business Newsletter: Spring 2026 Edition

Workplace Rights Refresher: Common Mistakes to Avoid

For each Workplace Rights Refresher segment, I analyze my small business support notes to see what topics are regularly challenging for my business buddies.

In this edition we're going to take a look at two types of workers who can sometimes be considered employees: independent contractors and family members.

Independent Contractors

Now, if someone is truly an independent contractor, they won't be an employee. However, there are a lot of misconceptions about what makes someone an independent contractor in Washington state. In part, that's because the IRS and the state have different criteria. Someone who's received a 1099 form may be a contractor to the IRS, but not to the state. 

To be an independent contractor in Washington state, a person would have to pass one of the independent contractor tests. One of the tests is the "personal labor test." If a worker isn't able to pass that, then we have what's called the "6-part and 7-part test." It's a series of six conditions that all must be true, plus a seventh condition that applies to construction. They are:

1. Be free from your control or direction.
2. Must pass one of the following three options:
   1. The service is outside the usual course of business.
   2. The service is performed outside all of the places of business.
   3. The individual is responsible for the costs of the principal place of business from which the service is performed.
3. Must pass 1 of the following 2 options: The individual:
   1. Is customarily engaged in an independently established trade, occupation, profession, or business, of the same nature as that involved in the contract of service.
   2. Has a principal place of business that is eligible for a business deduction for IRS purposes.
4. The individual is responsible for filing a schedule of expenses with the IRS.
5. The individual has established an account with the Department of Revenue and other state agencies as required.
6. The individual is maintaining a separate set of books or records that reflect all items of income and expenses.
7. (For construction only) The individual is properly registered as a contractor or has a valid electrical contractor license.

Want to learn more? Check out these resources:

• Visit the Independent Contractors page on the L&I website
• Independent Contractor Guide: A Step-by-Step Guide to Hiring Independent Contractors in Washington State
• Contact the Determinations Unit:
  • 360-902-6868
  • Determinations@Lni.wa.gov 
• Reach out to the Small Business Office:
  • SmallBusiness@Lni.wa.gov
  • 1-800-987-0145

Family Members

People are often surprised that family members can be considered employees when they are working for you. This also applies to the employer's children. (Note, the minimum age for employment is 14 years old.) If you are employing family members, you have the same requirements as you would for other paid workers, including:

• Pay them at least minimum wage. 
• Provide workers' compensation insurance. 
• Provide a paid 10-minute break for every four hours of work
• Offer a 30-minute meal break for every five hours of work.
• Make sure they work safely. 
• If children are working, follow the state's child labor laws and ensure that the work they do is appropriate for their age.

These requirements do not include family members who share ownership of a business, or children under the age of 18 who work on a farm owned by their parents.

Want to learn more? Check out these resources:

• Publication: If Family Members Work for You
• Employments Excluded [from workers' compensation coverage]
• Call Employment Standards at 360-902-5316
• Reach out to the Small Business Office:
  • SmallBusiness@Lni.wa.gov
  • 1-800-987-0145

Updated Equal Pay and Opportunities Act Policies

Have you ever checked out the administrative policies page on the L&I website? If you haven't, I  recommend taking a look and even bookmarking the page. It's a great resource when you're looking for detailed information on things like hours worked, overtime, and much more. 

Recently, L&I published an updated administrative policy that provides guidance on Equal Pay and Opportunities Act protections. Additional updates are pending after recent rulemaking will take effect in July 2026. Highlights include:

• a list of the 11 additional protected classes covered by the Equal Pay and Opportunities Act.
• a description of career advancement opportunities that are protected under the Equal Pay and Opportunities Act.
• guidance on job posting requirements under the Equal Pay and Opportunities Act, which  can be found in Administrative Policy ES.E.2, "Job Posting Requirements."

If you have questions, please contact the Employment Standards Program at 360-902-6625 or by equalpay@Lni.wa.gov     

To view the Spring 2026 Edition of L&I's Small Business Newsletter, click here.