Modern Worker Empowerment Act
Modern Worker Empowerment Act
Plain Language Summary
# Modern Worker Empowerment Act Summary **What the Bill Would Do:** The Modern Worker Empowerment Act would establish a clearer legal definition for who qualifies as an independent contractor versus an employee under federal labor laws. Currently, courts use different tests to make this determination, which can be confusing. Under this bill, workers would be classified as independent contractors if two conditions are met: (1) they control how they do their work, not just the final result, and (2) they have the typical risks and rewards of running their own business, like professional judgment and discretion. The bill also lists factors that cannot be used to classify someone as an employee. **Who It Affects & Why It Matters:** This bill primarily affects gig economy workers (like rideshare and delivery drivers), freelancers, and other independent contractors—as well as the companies that hire them.
The classification matters because employees are entitled to federal protections like minimum wage, overtime pay, and the right to organize unions, while independent contractors are not. Companies generally prefer contractor status (it costs less), while worker advocates worry stricter contractor definitions could deny protections to people who need them. **Current Status:** The bill is currently in committee as of the 119th Congress and has not yet been voted on. It was introduced by Representative Kevin Kiley, a Republican from California.
CRS Official Summary
This bill specifies a legal standard for determining whether an individual is considered an independent contractor rather than an employee for the purposes of federal labor laws that address issues such as the federal minimum wage, overtime compensation, and collective bargaining. The rights and protections provided by these laws exclusively apply to employees.Under the bill, an individual is considered an independent contractor if (1) another individual or entity does not exercise significant control over the details of how the individual's work is performed, without regard to any control the other individual or entity may exercise over the final result of the work performed; and (2) while performing such work, the individual has opportunities and risks inherent with entrepreneurship (for example, the discretion to exercise professional judgment).The bill also sets forth factors that may not be used to determine whether an individual is an employee. Specifically, factors such as whether another individual or entity requires the individual to meet certain legal, health and safety, insurance, or performance requirements may not be used to make such a determination.
Latest Action
Placed on the Union Calendar, Calendar No. 431.