As many of you know, artificial intelligence is no longer just a curiosity, or a substitute for Google, or something to amuse yourself during downtime. For many businesses, it’s become part of everyday operations — and in some cases, it’s taking over roles that used to be overseen by supervisors and managers.
For example, a professional services firm might use AI tools to screen applicants, select employees or contractors, and manage back-office HR functions like performance reviews or workflow allocation. A consulting platform might use software to assign projects and set deadlines based on client inputs. A janitorial services company might rely on scheduling systems that determine which subcontractor goes to which site and at what time. A general contractor might use project management software that sequences work, tracks progress, and flags delays. In each of these examples, the system is doing more than organizing information — it is shaping who performs work and how and when the work gets performed. In short, it is functioning as management.
No Clear Guidance — Yet
At this time, Washington has not yet issued any guidance on how AI management fits into the independent contractor analysis. There is no guidance declaring that AI supervision converts contractors into employees, there are no L&I or ESD publications addressing this issue, and there are no cases where agencies have tried to argue that contractors are being directed and controlled by management through AI platforms. Although I wouldn’t be surprised if this practice is already occurring in L&I and ESD audits, and those cases are now quietly making their way through the system.
Regardless, it doesn’t take much imagination to see how regulators might start trying to use AI management to conclude that independent contractors are subject to direction and control through AI, and should therefore be reclassified as employees. So businesses using these systems would be wise to give this some thought.
How Washington Might Analyze It
If Washington agencies were to evaluate AI supervision or management, I’d expect the starting point to be where it always starts: whether the contractor is being directed and controlled by the hiring entity.
An auditor evaluating a company’s AI platform and use could reasonably argue that when a company’s AI system selects contractors, assigns work automatically, dictates pricing, sets required response times, scores contractor performance, and restricts access to future assignments based on those scores, the company is exercising structured control. And the fact that the control is delivered through software rather than a human supervisor does not necessarily change the analysis. The argument would be straightforward: replacing a manager with an algorithm does not eliminate supervision; it just systematizes it — and, in some cases, makes it easier to detect and prove.
Under that view, AI management would be treated the same as traditional management. And it would be entirely consistent with Washington’s existing independent contractor frameworks, which often try to characterize every interaction with a contractor as proof of direction/control.
If this is how agencies will choose to evaluate AI platforms in the independent contractor space, the impact would be significant, since most modern businesses use software to coordinate work in one way or another. And if AI oversight starts getting treated as evidence of control, the line between independent contractor and employee – which already tends to favor reclassification of IC’s as employees — could start moving further in that direction, across far more than a few narrow industries.
How I’d Urge Washington to View AI “Supervision”
Before Washington treats algorithmic management as automatic supervision, it’s worth stepping back and asking what the independent contractor relationship is supposed to be in the first place.
As many of you know, an independent contractor relationship is fundamentally contractual. And every contract contains specifications. Deadlines. Quality standards. Deliverables. Expectations.
Established companies routinely contract with vendors subject to detailed service agreements and performance metrics. Those relationships are not treated as employment simply because the contract includes instructions.
So if these operational specifications don’t turn one established company into the employee of another, it’s fair to ask why similar specifications should automatically turn smaller contractors into employees.
That same principle should apply when those specifications are implemented through software. The presence of an algorithm should not, by itself, transform a contractual relationship into an employment one.
Looking Ahead
To be clear, the above discussion is still largely speculative. Washington has not yet drawn lines around algorithmic management in the classification context.
That said, businesses using AI to structure and manage contractor relationships should at least be thinking about how agencies like L&I and ESD might frame the issue, while recognizing that there may be an inclination to equate AI management with human management, and treat it accordingly, to your detriment. Hopefully, that is not the case, and our law and agencies will be able to distinguish between legitimate contractual structure and true employment-level control — even when that structure is increasingly powered by artificial intelligence.
But we’ll see where Washington ultimately lands.