All workers in Washington State are entitled to workers’ compensation unless they meet L&I's narrow exemption definitions. Those definitions and their requirements are outlined in the main independent contractor section. Remote workers, teleworkers, and gig economy workers have some particular considerations to be aware of regarding the exemption requirements.
If a worker is working outside of Washington State jurisdiction, they are not covered by workers’ comp. However, not all out-of-state workers are outside of our jurisdiction. Please refer to our out-of-state section at www.Lni.wa.gov/insurance/insurance-requirements/do-i-need-a-workers-comp-account/out-of-state-employers-and-out-of-state-workers to determine whether your out-of-state workers are covered under Washington State jurisdiction before reviewing further.
A worker is not automatically exempt from workers’ compensation because they are issued an IRS 1099 tax form. In fact, being issued an IRS 1099 tax form has no bearing on workers’ compensation coverage. You must review the exemption requirements for independent contractors to ensure you are classifying your workers correctly.
Teleworking or remote workers
A worker is not automatically exempt just because they do not work at your physical place of business. Remote workers and teleworkers are still subject to the same exemption requirements as other workers that work at your physical place of business. You must review the independent contractor exemption requirements paying close attention to questions around direction and control to understand if you must report these workers. All requirements must be met in order for the worker to be considered exempt.
App-based workers (gig economy workers)
A worker accessing work from an app-based platform that your business runs is not automatically exempt from coverage. Oftentimes, app-based (gig economy) workers are subject to significant forms of direction and control from the employer, including full control of the pay rate, ability to withhold pay, instruction on how to complete services, and the right to take punitive action based on customer evaluations. Being able to set their own schedule, using their own tools, or even having a business license isn’t enough for a worker to be exempt from coverage. The worker must also be completely free from direction and control and pass all other exemption requirements. As an employer of app-based workers, you must review all exemption requirements to understand your responsibilities and determine whether your workers are covered under workers’ compensation.