On June 1, 2020, the Seattle City Council unanimously passed an ordinance temporarily requiring certain companies that rely on “gig economy” workers to provide paid sick and safe time to those workers for the duration of the COVID-19 emergency. The ordinance, which now heads to Mayor Jenny Durkan for her consideration, is intended to “reduce the risk of gig workers working while sick and spreading illness” during the pandemic.  The ordinance’s effective date will be 30 days after the mayor approves it, or, if the mayor does not approve and return it within 10 days of presentation, the effective date will be 45 days after the city council’s passage.

Since 2012, Seattle’s paid sick and safe time ordinance has required nearly all private-sector employers to provide to employees who work in Seattle specified amounts of accrued, job-protected paid time off for personal illness, family care and other purposes. Since gig workers are categorized as independent contractors, they currently do not accrue paid sick and safe time under state and local laws.  Thus, this is a temporary expansion allowing paid sick and safe time to the independent contractors, although the method of accruing and compensating for the leave and some of the reporting requirement are quite different from the regular Seattle paid sick leave law.

Companies covered by the gig workers ordinance have some almost immediate reporting requirements to the Seattle Office of Labor Standards (described below) and to workers (notice of rights and policy), and will need to develop systems for workers to request paid sick and safe time, and to provide monthly reporting to workers regarding the status of paid sick and safe time availability, use, and accrual.   

Which Companies are Covered? The ordinance applies to companies operating in Seattle that provide food delivery service, as well as to “transportation network” companies.  

• A “food delivery network company” is one that offers prearranged delivery services for compensation using an online-enabled application or platform, such as an application dispatch system, to connect customers with workers for delivery from one or more of the following: (1) eating and drinking establishments, (2) food processing establishments, (3) grocery stores, or (4) any facility supplying groceries or prepared food and beverages for an online order. A food delivery network company includes any such entity or person acting directly or indirectly in the interest of a food delivery network company in relation to the food delivery network company worker.
• A “transportation network company” is one that offers prearranged transportation services for compensation using an online-enabled application or platform, such as an application dispatch system, to connect passengers with drivers using a “transportation network company endorsed vehicle,” as defined in Seattle Municipal Code Chapter 6.310.

For the purposes of this ordinance, covered companies are limited to those who hire 250 or more gig workers worldwide. This may include separate entities that form an integrated enterprise or where a separate entity controls the operation of another entity.

What is the Required Rate of Accrual for Paid Sick and Safe Time? Workers will accrue “at least” one day of paid sick and safe time for every 30 days worked. Accrual begins October 1, 2019, or on the date the worker commences work with the covered company, whichever is later.  Thus, the maximum a worker can accrue in a year is 12 days (if they made at least one “commercial trip” to Seattle every day of the month). A worker who worked five days a week in Seattle (perhaps a more typical schedule) would accrue nine days in a year.

For workers hired before the effective date of the ordinance, the covered company must choose how to accrue the paid sick leave in the time period before the effective date.  Covered companies may choose either:  (a) one day for every 30 worked in Seattle since October 1, 2019, or (b) five days on the effective date of the ordinance and then one day for every 30 days worked.  The covered company is required to select the same accrual method for all workers covered by this ordinance.  Covered companies must file information on their chosen accrual method with the Office of Labor Standards within 14 calendar days after the effective date of this ordinance.

In order to count as a “day worked,” a worker needs to make just a single “commercial stop” in Seattle in a calendar day, such as shopping in stores to fulfill online deliveries, making those deliveries, or picking up or dropping off customers. A “commercial stop” does not include stopping for refueling, for a personal meal or errands, time spent in Seattle solely for the purpose of travelling through Seattle from a point of origin outside Seattle to a destination outside Seattle with no commercial stops in Seattle.

Workers will continue to accrue paid sick and safe time until 180 days after the COVID-19 emergency orders covering Seattle have been lifted at both the local and state levels.

Is Carryover Required?  Workers must be allowed to carry over at least nine days of accrued, unused paid sick and paid safe time to the following year. Companies may allow for a more generous carryover. The “year” may be set as the calendar year, fiscal year, service year, or any other fixed, consecutive 12-month period established by the covered company, as long as it is used in the ordinary course of the company’s business for the purpose of calculating compensation to gig workers.  If the company does not establish a year, it will be set as the calendar year.

Can the Covered Company Frontload vs. Accrue? As an alternative to accrual, companies may, but are not required to, frontload paid sick and paid safe time to a worker in advance of the required accrual. Frontloaded paid sick and paid safe time must meet requirements for accrual, use, and carryover, and shall otherwise comply with the provisions of the ordinance. The company must correct any discrepancies, between the frontloaded paid sick and paid safe time and the amount of paid sick and paid safe time the employee would have accrued no later than 30 days after discovery or notice of the discrepancy. Companies may not request or require reimbursement from a worker who uses frontloaded paid sick and paid safe time that exceeds the amount of paid sick and paid safe time the worker would have accrued absent frontloading.

What is the Required Rate of Pay? Workers must be paid their “average daily compensation,” which is their average daily income during their highest-paid month, once again looking back to October 1, 2019. The qualifying income includes payments from the company, bonuses, commissions, and tips. Moving forward, the average daily compensation would be recalculated every month.

How Quickly Must Workers be Paid? Companies must compensate the worker for the requested day(s) of paid sick time and paid safe time no later than 14 calendar days or the next regularly scheduled date of compensation following the requested day(s) of paid sick and paid safe time. If verification is required by the company, the worker must be compensated for the requested day(s) of paid sick and safe time no later than the worker’s next regularly scheduled date of compensation after the verification is provided.

How Can a Worker Request to Use PSST? Companies shall establish an accessible system for workers to request and use paid sick and paid safe time. Such system shall be available to the worker via smartphone application or online web portal.

Are Covered Companies Entitled to an Offset for Other Paid Leave Used by a Worker for a PSST Purpose? Yes, when compensating workers for paid sick and safe time, companies may subtract the amount of compensation provided to a worker for other paid leave used for a paid sick and safe time purpose between October 1, 2019 and the ordinance’s effective date.

When May a Worker Use PSST? Companies must make accrued days of paid sick and safe time available for use no more than one week after the date of accrual. A worker may only use accrued sick and safe time if they performed work for the company in whole or part in Seattle within the 90 days prior to their request. In addition, a worker is entitled to use paid sick and paid safe time during a deactivation or other status that prevents work for the company, unless such status is due to a verified allegation of sexual assault perpetrated by the worker.  

What are the Covered Uses? Workers may use paid sick and safe time for several different reasons, consistent with the city’s rules under the regular paid sick and safe time law:

• For a personal mental or physical illness, injury, or health condition; to accommodate the gig worker’s need for medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition; or a gig worker’s need for preventive medical care; and
• For care of a family member with a mental or physical illness, injury, or health condition; care of a family member who needs medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition; or care of a family member who needs preventive medical care.

A worker may use paid safe time for the following reasons:

• When the company has suspended or otherwise discontinued operations by order of a public official, for any health-related reason, to limit exposure to an infectious agent, biological toxin, or hazardous material;
• When the company has reduced, suspended, or otherwise discontinued operations for any health- or safety-related reason;
• When the gig worker’s family member's school or place of care has been closed; and
• For any of the following reasons related to domestic violence, sexual assault, or stalking:
  
  • Seek legal or law enforcement assistance or remedies to ensure the health and safety of the gig worker or family or household members, including but not limited to, preparing for, or participating in, any civil or criminal legal proceeding related to or derived from domestic violence, sexual assault, or stalking;
  • Seek treatment by a health care provider for physical or mental injuries caused by domestic violence, sexual assault, or stalking, or to attend to health care treatment for a victim who is the gig worker’s family or household member;
  • Obtain, or assist a family or household member in obtaining, services from a domestic violence shelter, rape crisis center, or other social services program for relief from domestic violence, sexual assault, or stalking;
  • Obtain, or assist a family or household member in obtaining, mental health counseling related to an incident of domestic violence, sexual assault, or stalking, in which the gig worker or the gig worker’s family or household member was a victim of domestic violence, sexual assault, or stalking; or
  • Participate in safety planning, temporarily or permanently relocate, or take other actions to increase the safety of the gig worker or gig worker’s family or household members from future domestic violence, sexual assault, or stalking.

Covered Relations. For purposes of determining eligibility for paid sick and safe time,

• “Family member” means a child, parent, spouse, registered domestic partner, grandparent, grandchild, or sibling;
• “Child” means a biological child, adopted child, foster child, stepchild, or a child to whom a gig worker stands in loco parentis, is a legal guardian, or is a de facto parent, regardless of age or dependency status; and
• “Parent” means a biological parent, adoptive parent, de facto parent, foster parent, stepparent, or legal guardian of a gig worker or the gig worker’s spouse or registered domestic partner, or a person who stood in loco parentis when the gig worker was a minor child.

For purposes of determining eligibility for paid safe time,

• “Family member” also includes any individual whose relationship to the gig worker can be classified as a parent-in-law or person with whom the gig worker has a dating relationship.
• “Household members” means, domestic partners, former spouses, former domestic partners, persons who have a child in common regardless of whether they have been married or have lived together at any time, adult persons related by blood or marriage, adult persons who are presently residing together or who have resided together in the past, persons 16 years of age or older who are presently residing together or who have resided together in the past and who have or have had a dating relationship, and persons who have a biological or legal parent-child relationship, including stepparents and stepchildren and grandparents and grandchildren.

How Much PSST Can a Worker Take at One Time? The time must be used in 24-hour increments. This is in contrast to traditionally covered employees, who are permitted to use any and all hours that they have accrued and in increments as small as the smallest amount of time that an employer tracks work time (but no longer than an hour).

When Can Companies Request Verification of Absence? During a civil emergency proclaimed by a public official in response to COVID-19, it shall automatically be considered an unreasonable burden for a company to require verification from a health care provider.  

Otherwise, consistent with Seattle’s existing paid sick and safe time law, when a worker uses more than three consecutive days of paid sick and paid safe time, the company may require reasonable verification that the worker used paid sick time and paid safe time for an authorized purpose. A company’s requirements for verification may not result in an unreasonable burden or expense on the worker and shall not intrude upon the worker’s privacy. Thus, in those instances where the company is allowed to request verification, the employer must take the following steps:

• The company shall notify the worker of the right to provide an oral or written explanation asserting that the worker used paid sick and paid safe time for an authorized purpose and describing how the company’s verification requirement would create an unreasonable burden or expense.
• If the worker provides an explanation, a company shall respond within 10 calendar days and shall provide alternatives for the worker to meet the verification requirement in a manner that does not result in an unreasonable burden or expense on the worker. Examples of such alternatives include:
  
  • a company’s acceptance of a worker’s oral or written statement that the worker used paid sick time for an authorized purpose;
  • a company’s acceptance of documentation from a different source than identified in the initial verification requirement, such as documentation from a service provider indicating that the worker used paid sick time or paid safe time for an authorized purpose; or
  • a company’s payment for at least half the cost of the worker’s out-of-pocket expenses to obtain the verification.

When Can Companies Withhold Payment for PSST? If a company establishes that the paid sick and safe time was not used for an authorized purpose (i.e., not for a paid sick leave purpose), or the worker fails to provide the requested verification (if allowed to request), or if a worker accepts an offer of prearranged services for compensation from the company during the 24-hour period(s) for which the worker requested day(s) of paid sick and paid safe time, a company may withhold compensation for the requested day(s) of paid sick and paid safe time, under the following procedure:

• The company shall provide the worker with written notification, in a format that is readily accessible to the gig worker, of the company’s decision to withhold compensation.
• The company shall provide a method of contact and accessible procedure for the worker to contest the withholding of compensation and to assert that the worker’s use of paid sick and paid safe time was for an authorized purpose.
• The company shall not subsequently restrict the worker's future use of such paid sick and safe time or deduct it from the worker’s days of paid sick and paid safe time available for use.
• The company shall not take adverse action against the worker, other than withholding compensation for the applicable days of paid sick and paid safe time.

Is Monthly Reporting Required? At least monthly, the company must provide workers with written notification of the following:

• current rate of average daily compensation for use of paid sick and paid safe time;
• an updated amount of accrued paid sick and paid safe time since the last notification;
• reduced paid sick and paid safe time since the last notification;
• any unused paid sick and paid safe time available for use; and
• in the event the company provided other paid leave to the worker between October 1, 2019 and the effective date of the ordinance, any amount that the company subtracts from the worker’s compensation for use of this other paid leave. 

The company may choose a reasonable system for providing this notification, including but not limited to, a pay stub, a weekly summary of compensation information, or an online system where workers can access their own paid sick and paid safe time information. The company is not required to provide this notification if the worker has not worked any days since the last notification.

What are the Company’s Recordkeeping Requirements? Companies must retain records that document compliance with this ordinance for each worker, including: Date of commencement of work; Days worked in whole or part in Seattle; Compensation for days worked in whole or part in Seattle; Rates of average daily compensation as calculated every calendar month; Paid sick and paid safe time accrued, and any unused paid sick and paid safe time available for use; and Paid sick and paid safe time reductions, including but not limited, to paid sick and paid safe time used, paid sick and paid safe time donated to a co-worker through a shared leave program, or paid sick and paid safe time not carried over to the following year. These records must be retained for three years from the date of days worked or the date of use of paid sick and paid safe time.

Is a Notice of Rights and Written Policy Required? Companies are required to provide each worker eligible to accrue paid sick and paid safe time with a written notice of rights established by this ordinance and of the company’s policy and procedure meeting the requirements of the ordinance. The notice and policy must be provided to workers in an electronic format that is readily accessible and be made available to the worker via smartphone application or online web portal, in English and any language that the company knows or has reason to know is the primary language of the workers.

Are Returning Workers Entitled to Reinstatement of Accrued PSST? Yes, if a worker separates from work due to inactivity, deactivation, or other reason, and commences working within 12 months of separation by the same company, then:

• Previous work must be counted for purposes of determining the worker’s eligibility to use accrued paid sick and safe time, except that, if separation does occur, the total time of work used to determine eligibility must occur within three years.
• Previously accrued, unused paid sick and safe time must be retained by the worker and the worker is entitled to use such paid sick and safe time.

If a worker separates from work and commences work after 12 months of separation by the same company, the worker is not entitled to retain previously accrued paid sick and safe time and the worker is considered to have newly commenced work.

What Entity Enforces the Ordinance? The Office of Labor Standards is authorized to enforce the legislation.

Is Retaliation Prohibited? As with other paid leave laws, retaliation is strictly prohibited. No company or person may interfere with, restrain, or deny the exercise of, or the attempt to exercise, any right protected under this ordinance.  Retaliation includes the prohibition against taking any adverse action against any person because the person has exercised in good faith the rights protected under this ordinance. “Adverse action” towards a worker involves any aspect of work, including compensation, work hours, responsibilities, or other material change in the terms and conditions of work, including: reducing the compensation paid to the worker, garnishing gratuities, temporarily or permanently denying or limiting access to work, incentives, or bonuses, offering less desirable work, demoting, terminating, deactivating, putting a worker on hold status, failing to rehire after a seasonal interruption of work, threatening, penalizing, retaliating, engaging in unfair immigration-related practices, filing a false report with a government agency, or otherwise discriminating against the worker for any reason prohibited by the ordinance. “Adverse action” also encompasses any action by the company or person acting on the company’s behalf that would dissuade a reasonable person from exercising any right afforded by the ordinance.

The ordinance also imposes a rebuttable presumption of retaliation if an adverse action is taken within 90 days of a person’s exercise of rights under the ordinance and imposes a heightened standard of proof of “clear and convincing evidence” for the company to rebut this presumption. 

What Penalties are Available? For a first violation of this ordinance, the city may assess a penalty of up to $546.07 per aggrieved party. For a second violation, there is a penalty of up to $1,092.13 per aggrieved party, or an amount equal to 10% of the total amount of the unpaid compensation, whichever is greater. For a third or any subsequent violation of this ordinance, there is a penalty of up to $5,462.70 per aggrieved party, or an amount equal to 10% of the total amount of unpaid compensation, whichever is greater. The maximum penalty for a violation of this ordinance is $21,849.79 per aggrieved party, or an amount equal to 10% of the total amount of unpaid compensation, whichever is greater. At least 50% of the penalty shall be paid to the “aggrieved party,” but the enforcement agency may specify that the entire penalty is payable. 

The city may also assess fines (which may be payable to the aggrieved party) of up to $546.07 per aggrieved party (except for retaliation, which is $1,092.13 per aggrieved party), for the following:

• Failure to establish an accessible system for a worker to request and use paid sick and paid safe time;
• Failure to provide notification of the current rate of average daily compensation and an updated amount of paid time available for use as paid sick and paid safe time;
• Failure to provide workers with written Notice of Rights;
• Failure to provide workers with the hiring entity’s written policy and procedure for meeting paid sick and paid safe time requirements; and
• Failure to comply with prohibitions against retaliation for exercising rights.

In addition, the city may impose fines for failure to retain required records for three years of $546.07 per missing record, and failure to provide notice of investigation to workers ($546.07).The maximum amount that may be imposed in fines in a one-year period for each type of violation listed above is $5,462.70 unless a fine for retaliation is issued, in which case the maximum amount is $21,849.79.

Is There a Private Right of Action? In addition to the above penalties, any person or class of persons that suffers financial injury as a result of a violation of this ordinance, or is the subject of prohibited retaliation, may bring a civil action in court. Workers may be awarded reasonable attorneys’ fees and costs and such legal or equitable relief as may be appropriate to remedy the violation including, without limitation: the payment of any unpaid compensation plus interest due to the worker, liquidated damages in an additional amount of up to twice the unpaid compensation, and a penalty payable to any aggrieved worker of up to $5,462.70 plus interest if the aggrieved worker was subject to prohibited retaliation.

When Does the Ordinance Expire? The ordinance expires on December 31, 2023, or three years after the termination of the COVID-19 emergency declarations, whichever is later. However, workers will only accrue and be able to use paid sick and safe time through 180 days after the COVID-19 emergency orders covering Seattle have been lifted at both the local and state levels.

What is the Statute of Limitations? The Office of Labor Standards must commence its investigation within three years of the alleged violation. To the extent permitted by law, the applicable statute of limitations for civil actions is tolled during any investigation under this ordinance and any administrative enforcement proceeding under this ordinance based upon the same facts.

Are There Enforceability Issues? It is expected that affected companies will challenge the enforceability of the ordinance on various grounds, including to the extent that it mandates that companies cannot reduce the business they are doing in Seattle as a result of the ordinance.