Sec. 2. Classification of employees and non-employees
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Section 3 of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 203 ) is amended by adding at the end the following: Non-employee means an individual who— a person has engaged, in the course of the trade or business of the person, for the performance of labor or services; and is not an employee of the person. Covered individual when used with respect to an employer or other person means— an employee of the employer; or a non-employee of the person (including a person who is an employer)— whom the person has engaged, in the course of the trade or business of the person, for the performance of labor or services; and with respect to whom the person is required to file an information return under section 6041A(a) of the Internal Revenue Code of 1986; or who is providing labor or services to the person through an entity that is a trust, estate, partnership, association, company, or corporation (as such terms are used in section 7701(a)(1) of the Internal Revenue Code of 1986) if— such individual has an ownership interest in the entity; creation or maintenance of such entity is a condition for the provision of such labor or services to the person; and the person would be required to file an information return for the entity under section 6041A(a) of the Internal Revenue Code of 1986 if the entity was an individual. .
Section 11(c) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 211(c) ) is amended— by striking
(c)Every employer subject to any provision of this Act or of any order issued under this Act and inserting the following: Every person subject to any provision of this Act or of any order issued under this Act ; and by adding at the end the following: Every person (including every employer and enterprise), who employs any employee engaged in commerce or in the production of goods for commerce or engages any non-employee engaged in commerce or in the production of goods for commerce, shall— accurately classify each covered individual as an employee or a non-employee (as the case may be); provide, to each covered individual, a written notice that— informs the covered individual of the classification of such individual, by the person submitting the notice, as an employee or a non-employee; includes a statement directing such individual to the Department of Labor website established under section 3 of the Payroll Fraud Prevention Act of 2013 , or other appropriate resources, for the purpose of providing further information about the legal rights of an employee; includes the address and telephone number for the applicable local office of the Department of Labor; and includes for each covered individual classified as a non-employee by the person providing the notice, the following statement: Your rights to wage, hour, and other labor protections depend upon your proper classification as an employee or a non-employee. If you have any questions or concerns about how you have been classified or suspect that you may have been misclassified, contact the U.S. Department of Labor. ; and maintain a copy of such notice as a required record under paragraph (1). The notice described in subparagraph (A)(ii) shall be provided, at a minimum, to each covered individual not later than 6 months after the date of enactment of the Payroll Fraud Prevention Act of 2013 , and thereafter— for each new employee, upon employment; and for each new non-employee, upon commencement of the labor or services provided by the non-employee. Each person required to provide a notice under subparagraph (A)(ii) to a covered individual shall also provide such notice to such individual upon changing the status of such individual as an employee or a non-employee. For purposes of this Act and the regulations or orders issued under this Act, a covered individual to whom a person is required to provide a notice under subparagraph (A)(ii) shall be presumed to be an employee of the person if the person has not provided the individual with such notice within the time required under subparagraph (B). The presumption under clause
(i)shall be rebutted only through the presentation of clear and convincing evidence that a covered individual described in such subparagraph is not an employee of the person. . Section 15(a) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 215(a) ) is amended— by striking paragraph
(3)and inserting the following: to discharge or in any other manner discriminate against any covered individual (including an employee) because such individual has— opposed any practice, filed any petition or complaint, or instituted or caused to be instituted any proceeding— under or related to this Act (including concerning the status of a covered individual as an employee or a non-employee for purposes of this Act); or concerning the status of a covered individual as an employee or a non-employee for employment tax purposes within the meaning of subtitle C of the Internal Revenue Code of 1986; testified or is about to testify in any proceeding described in subparagraph (A); or served, or is about to serve, on an industry committee; ; in paragraph (5), by striking the period at the end and inserting ; and ; and by adding at the end the following: to wrongly classify an employee of the person as a non-employee in accordance with section 11(c)(2). . Section 16 of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 216 ) is amended— in subsection (b)— in the sixth sentence, by striking any employee each place the term occurs and inserting any covered individual ; in the fourth sentence— by striking employees and inserting covered individual ; and by striking he gives his consent and inserting such covered individual consents ; in the third sentence— by striking either of the preceding sentences and inserting any of the preceding sentences ; by striking one or more employees and inserting one or more covered individuals ; and by striking in behalf of himself or themselves and other employees and inserting on behalf of such covered individual or individuals and other covered individuals ; and by inserting after the first sentence the following: Such liquidated damages are doubled (subject to section 11 of the Portal-to-Portal Act of 1947 ( ; and 29 U.S.C. 260 )) where, in addition to violating the provisions of section 6 or 7, the employer has violated the provisions of section 15(a)(6) with respect to such employee or employees. in subsection (e), by striking paragraph
(2)and inserting the following: Any person who violates section 6, 7, 11(c), or 15(a)(6) shall be subject to a civil penalty, for each employee or other individual who was the subject of such a violation, in an amount— not to exceed $1,100; or in the case of a person who has repeatedly or willfully committed such violation, not to exceed $5,000. .
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Sec. 2
Classification of employees and non-employees
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