How daily supervision and company timeclocks exposed a costly misclassification
A Washington appeals court just handed down a $2 million lesson about subcontractors: calling workers someone else's employees doesn't make it so.
In Newway Forming, Inc. v. City of Seattle, the Washington Court of Appeals published a decision on January 12, 2026, that should make every HR professional take a hard look at their subcontracting arrangements.
At the center of the dispute was Newway Forming, Inc., a concrete-forming company that in 2018 made an oral agreement with Baja Concrete USA Corp. to supply workers for its Seattle construction sites. On paper, Baja was the employer. In practice, things looked quite different.
When Seattle's Office of Labor Standards investigated in 2020, they found workers weren't getting overtime, meal breaks, rest periods, or proper minimum wage. Records were a mess. The violations across multiple workers over two years totaled more than $2 million.
Newway's defense was straightforward: these weren't our employees. Any violations were Baja's problem. The city disagreed, determining that Newway was a joint employer and therefore on the hook for the violations right alongside Baja.
The case went to a 14-day hearing where workers testified about their daily reality. The picture that emerged was telling. Newway foremen gave workers their assignments, answered their questions, and corrected their mistakes. Baja supervisors mostly just dropped workers off and...
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