As many of you know, and as we’ve tried to educate any client who will listen, calling workers independent contractors does not necessarily mean that you are not required to pay L&I premiums (and sometimes ESD premiums) on those contractors. DoorDash is learning this through a lengthy appeal involving its independent contractor food delivery drivers.
L&I Audits DoorDash and Finds Independent Contractors to be “Covered Workers”
L&I began auditing DoorDash in April 2019. A second audit followed, and together the audits covered DoorDash’s operations in Washington from July 2017 through December 2019. During that period, DoorDash treated approximately 26,500 “Dashers” as independent contractors and did not pay L&I premiums on their work. L&I ultimately determined that the Dashers were covered workers, meaning workers for whom DoorDash was required to report hours and pay workers’ compensation premiums, and assessed DoorDash approximately $14.5 million in workers’ compensation premiums and penalties.
What’s worth noting about this case is that there was no dispute about whether the Dashers were independent contractors or employees. L&I agreed that the Dashers were independent contractors, and the parties stipulated to that fact during the appeal. Rather, the issue was whether the Dashers, despite being independent contractors, were nevertheless the type of independent contractors who are covered workers under Washington’s workers’ compensation laws.
The audit concluded that the Dashers were covered workers because, although they were independent contractors, they did not qualify for either of the exemptions that would have taken them outside L&I coverage: the independent contractor exemption under RCW 51.08.195, which generally applies to contractors operating an independent business, or the White test under RCW 51.08.180, which can apply when contractors provide significant equipment in addition to their labor.
DoorDash Appeals Finding and Loses at Each Level
DoorDash challenged the assessments before the Board of Industrial Insurance Appeals, but lost. It then appealed to Thurston County Superior Court and lost again. And in July 2026, the Washington Court of Appeals affirmed the superior court, leaving the approximately $14.5 million assessment in place.
The latest appeal involved a fairly narrow legal issue (i.e. collateral estoppel) concerning whether an earlier case involving another delivery company, in which the drivers were ultimately found to be exempt from L&I coverage, prevented L&I from treating the Dashers as covered workers. The court rejected DoorDash’s collateral estoppel argument and allowed the lower court’s decision to stand: i.e. although DoorDash’s drivers were independent contractors, they were nevertheless covered workers under the lower court’s ruling and therefore DoorDash was required to pay L&I premiums on them.
Independent Contractor Does Not Necessarily Mean L&I Exempt
The DoorDash case is a good illustration of an issue we regularly see with clients who hire independent contractors and during L&I audits. A business can have legitimate independent contractors and still be required to pay L&I premiums on them. So if your contractors are legitimate independent contractors, but they are not exempt, what are you supposed to do?
First, accept the reality of what Washington law requires. Over the years, we’ve been consulted by clients who refuse to believe their independent contractors can still be covered workers, and a few years after consulting with them, I’ll come across their court cases where they’ve lost appeals for the very reasons I told them they would lose.
Second, understand that just because L&I is requiring you to pay premiums on independent contractors does not mean they are no longer independent contractors. Many businesses whose independent contractors are covered workers can continue to treat those workers as independent contractors, while treating them as covered workers for L&I purposes and paying the workers’ compensation premiums required by L&I. See our blog discussing this “hybrid independent contractor” approach: https://mercerlawpllc.com/is-a-hybrid-independent-contractor-relationship-right-for-you/
DoorDash is obviously an extreme example. Most businesses will never face a $14.5 million assessment. But the lesson from the case applies just as much to a business with five independent contractors as it does to one with 26,500: independent contractor status and exemption from L&I coverage are not the same thing.
DoorDash has asked the Washington Supreme Court to review the Court of Appeals decision, and its petition for review is currently pending.