I've seen this being enforced in clubs that have bands performing in them this year. The state liquor control board cites WAC 314-11-015, which was last amended in 2004, along with an unnamed 'case law', which defines non-payroll contract-for-hire musical acts as 'employees' of the bar (even if they are unpaid).
I would like to know the details of the 'case law' they cite, and I would also like to know if this application of case law can be overruled by a WA state voter proposition