21st Century Worker Act Aims to End Worker Classification Confusion

Today, Sen. Mike Lee (R-UT) introduced the 21st Century Worker Act, a much needed practical step to clear up persistent confusion surrounding worker classification under federal law.

The bill would replace the current patchwork of conflicting standards under the Fair Labor Standards Act, National Labor Relations Act, and Internal Revenue Code with a single, clear bright line test for determining independent contractor status across federal labor and tax statutes. It also directs the Government Accountability Office (GAO) to assess the impact of these new standards and allows workers and businesses freedom to mutually elect worker status in cases where conventional classifications do not apply clearly.

CEI Research Fellow Sean Higgins praised the Senator’s leadership and the bill’s commonsense approach:

“The 21st Century Worker Act addresses a real problem faced by workers and employers alike: the current patchwork of workplace laws and regulations creates uncertainty over whether a worker is a traditional employee or a freelancer in business for themselves. ‘Worker classification’ standards should be clear, easy to apply, and not inherently hostile to innovative workplace arrangements. The 21st Century Worker Act would create a common-sense, bright-line test across federal labor and tax statutes to settle this confusion while preserving the rights of workers to seek out these new type of arrangements if they so choose.

The Labor Department is currently on its fourth revising of this worker classification rule in as many presidential administrations and will likely continue to be rewritten with each partisan swing of the executive branch. This volatile situation benefits neither workers nor management. Congress should take up legislation like the 21st Century Worker Act that resolves the matter once and for all.