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Code · BILL · 119th Congress · S. 4010 (Introduced in Senate) — To clarify the classification of service provider payees as employees or independent contractors in Federal law. · Sec. 101

Sec. 101. Definitions

1,019 words·~5 min read·/bill/119/s/4010/is/section-101·

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

In this title: The term bona fide sole proprietor means a service provider payee who— has entered into a written contract governing the terms of the goods or services provided to a service recipient payor and the contract is not an employment by agreement; is not required to provide the goods or services exclusively for the service recipient payor; and has not had a substantial economic relationship or employment by agreement with the service recipient payor as described in section 104 during the previous calendar year.
The term business entity — means a corporation, limited liability company, limited partnership, limited liability partnership, limited liability limited partnership, statutory business trust, or a similar entity formed under the laws of the United States, under the law of a State or United States territory (including the District of Columbia), or under the laws of a foreign country; and includes a general partnership not described in subparagraph
(A)that has registered to do business under State or local law. The term compensation — means consideration paid by a service recipient payor to a service provider payee for goods or services provided; and includes payments in money, payments in property, wages, salaries, benefits, and other types of payment. For purposes of determining the amount of compensation, the value of payments in a form other than legal tender shall be determined by the fair market value of the payment on the date of payment. The term direct sales service provider payee means a service provider payee who is a direct seller, as defined in section 3508(b) of the Internal Revenue Code of 1986. The term elective classification service provider payee means a service provider payee who is not classified as either— a mandatory independent contractor under section 103; or a mandatory employee under section 104. The term employee means an individual who— is a service provider payee; and is— classified as a mandatory employee under section 104; or classified as an employee under section 105. The term employer means a service recipient payor— that is in a substantial economic relationship with a service provider payee who is classified as an employee under section 104 with respect to the service recipient payor; that has entered into employment by agreement under section 104 with a service provider payee; or for whom a service recipient payee has elected to be classified as an employee under section 105. The term employment by agreement means an agreement, whether written or otherwise, between a service recipient payor and a service provider payee that demonstrably expresses their mutual intent to form an employer-employee relationship. The term formal bona fide contractor , when used with respect to a service provider payee providing goods or services to a service recipient payor, means a service provider payee who— is recognized as a contractor under applicable State law; or is not required to provide the goods or services exclusively for the service recipient payor and has— entered into a written contract governing the terms of the goods or services provided to the service recipient payor that is not designated as an employment by agreement; incurred unreimbursed expenses related to providing the goods or services to the service recipient payor annually that exceed 5 percent of the total compensation made to the service provider payee by the service recipient payor; and not had a substantial economic relationship or employment by agreement with the service recipient payor as described in section 104 during the previous calendar year. The term independent contractor means a service provider payee who— is classified as a mandatory independent contractor under section 103; or is classified as an independent contractor under section 105. The term licensed profession, trade, or occupation means a profession, trade, or occupation that may not be lawfully engaged in unless a license from a Federal, State, or local government is obtained. The term limited economic relationship means an economic relationship between a service recipient payor and a service provider payee under which— the compensation to the service provider payee by the service recipient payor is based on a period of time worked; the period of time worked for which the service provider payee is compensated by the service recipient payor is less than 30 days per calendar quarter; and the service provider payee is not required to provide the goods or services exclusively for the service recipient payor. The term money means any legal tender as defined in section 5103 of title 31, United States Code. The term period of time worked includes any specified period of time worked, including hourly, daily, weekly, bi-weekly, bi-monthly, monthly, quarterly, or annually periods of time. The term sales commission means compensation based on sales made by the service provider payee or by individuals managed, supervised, advised, or recruited by the service provider payee. The term Secretary means the Secretary of Labor. The term service provider payee means an individual providing goods or services to a service recipient payor in return for compensation paid to the individual by the service recipient payor. The term service recipient payor means a person receiving goods or services from a service provider payee in return for compensation paid by the person to the service provider payee. The term substantial economic relationship means an economic relationship between a service recipient payor and a service provider payee where— the service provider payee is a natural person; more than 75 percent of the compensation to the service provider payee by the service recipient payor is based on a period of time worked; the service recipient payor determines the hours of work; and the service recipient payor requires the service provider payee to work substantially full-time for the service recipient payor for a period of 4 consecutive weeks or more. The term substantially full-time means an average of 30 or more hours per week during the relevant period of time worked. The term written contract means writing sufficient to indicate that a contract has been made between the parties that is legally enforceable in the jurisdiction or jurisdictions where the services by the service provider payee are performed or to be performed.
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