February 26, 2025

By: Gaetan J. Alfano , Tatyanah M. Brehouse

On February 13, 2025, U.S. House Republican, Kevin Kiley, introduced two bills that would fundamentally change how employers classify workers as well as impact wage and hour litigation. Aimed at supporting and protecting independent contractors, the Modern Worker Empowerment Act (H.B. 1319) and the Modern Worker Security Act (H.B. 1320) would establish a clearer and more predictable test for determining whether a worker is classified as an independent contractor or employee and would provide a federal safe harbor that would allow companies to provide portable benefits without the risk of reclassification.

The Modern Worker Empowerment Act seeks to clarify the standard for determining whether a worker is classified as an employee or an independent contractor. The bill would amend the Fair Labor Standards Act of 1928 (U.S.C. 203(e)) by classifying a worker as an independent contractor if: (1) the hiring party does not exercise significant control over how the work is performed and (2) the worker assumes the opportunities and risks inherently associated with entrepreneurship. It would further preclude the consideration of whether the hiring party requires compliance with applicable laws and regulations, compliance with health and safety standards more stringent than otherwise applicable, insurance, compliance with insurance mandates, or compliance with contracted for performance standards in the determination that a worker is an employee. It would also amend the National Labor Relations Act (29 U.S.C. 152(3)) to use the proposed amended language to the Fair Labor Standards Act to determine whether a worker is an independent contractor or an employee.

The Modern Worker Security Act seeks to allow hiring parties to provide portable benefits to independent contractors without the risk of those independent contractors being re-classified as employees by federal agencies. It would expressly preclude the provision of a portable benefit in the determination of whether a worker is an employee. The amendment would allow for independent contractors to receive work-related benefits and protections such as health insurance, paid leave, retirement savings, and workers’ compensation without the risk of re-classification.

If passed, the bills would supersede the current final rule implemented under the Biden administration’s Department of Labor (DOL) in 2024. The final rule established the economic realities test, a six-factor balancing test consistent with judicial precedent, as the test for determining the classification of a worker. The Biden administration’s DOL’s final rule rescinded the independent contractor status rule established under the Trump administration’s DOL in 2021. The adoption of the economic realities test resulted in a more restrictive test which made it more challenging for a worker to be classified as an independent contractor. Kiley’s proposed bills would reverse that effect and prevent workers who prefer their independent contractor status from being forced to be classified as employees. Our firm will continue to monitor this potentially game-changing legislation in the employment space. If you have any questions, contact attorneys Gaetan Alfano at gja@pietragallo.com or Tatyanah Brehouse at tmb@pietragallo.com.