Proposal to Simplify Employee Classifications Introduced

Senator Mike Lee (R-UT) has introduced S. 4010, the 21st Century Worker Act, to simplify employee classifications. According to a press release, the bill would do the following. 

• Creates a bright line test by outlining the most common factors that make a worker either an independent contractor or an employee.
• Creates a third category for workers who do not cleanly meet the definition of an independent contractor or employee, outlining a process for workers and businesses to mutually elect worker status in certain instances.
  • If the business and its employee cannot agree on status, the worker will be classified as an independent contractor by default.
• Commissions a GAO study to identify how harmonizing other laws with this bright-line test would impact workers and payors.

The bill has been referred to the Senate Committee on Finance.