I 
113TH CONGRESS 
2D SESSION 
H. R. 4611 
To amend the Fair Labor Standards Act of 1938 to ensure that employees 
are not misclassified as non-employees, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 8, 2014 
Mr. COURTNEY (for himself, Mr. PAYNE, Mr. GEORGE MILLER of California, 
Mr. TIERNEY, and Mr. BISHOP of New York) introduced the following 
bill; which was referred to the Committee on Education and the Work-
force, and in addition to the Committee on Ways and Means, for a period 
to be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To amend the Fair Labor Standards Act of 1938 to ensure 
that employees are not misclassified as non-employees, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Payroll Fraud Preven-
tion Act of 2014’’. 
VerDate Mar 15 2010 
20:16 May 16, 2014
Jkt 039200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H4611.IH
H4611
TKELLEY on DSK3SPTVN1PROD with BILLS
SEC. 2. CLASSIFICATION OF EMPLOYEES AND NON-EM-
PLOYEES. 
(a) DEFINITIONS.—Section 3 of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 203) is amended by 
adding at the end the following: 
‘‘(z) ‘Non-employee’ means an individual who— 
‘‘(1) a person has engaged, in the course of the 
trade or business of the person, for the performance 
of labor or services; and 
‘‘(2) is not an employee of the person. 
‘‘(aa) ‘Covered individual’ when used with respect to 
an employer or other person means— 
‘‘(1) an employee of the employer; or 
‘‘(2) a non-employee of the person (including a 
person who is an employer)— 
‘‘(A) whom the person has engaged, in the 
course of the trade or business of the person, 
for the performance of labor or services; and 
‘‘(B)(i) with respect to whom the person is 
required to file an information return under 
section 6041A(a) of the Internal Revenue Code 
of 1986; or 
‘‘(ii) who is providing labor or services to 
the person through an entity that is a trust, es-
tate, partnership, association, company, or cor-
poration (as such terms are used in section 
VerDate Mar 15 2010 
20:16 May 16, 2014
Jkt 039200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H4611.IH
H4611
TKELLEY on DSK3SPTVN1PROD with BILLS
7701(a)(1) of the Internal Revenue Code of 
1986) if— 
‘‘(I) such individual has an ownership 
interest in the entity; 
‘‘(II) creation or maintenance of such 
entity is a condition for the provision of 
such labor or services to the person; and 
‘‘(III) the person would be required to 
file an information return for the entity 
under section 6041A(a) of the Internal 
Revenue Code of 1986 if the entity was an 
individual.’’. 
(b) CLASSIFICATION AS EMPLOYEES.—Section 11(c) 
of the Fair Labor Standards Act of 1938 (29 U.S.C. 
211(c)) is amended— 
(1) by striking ‘‘(c) Every employer subject to 
any provision of this Act or of any order issued 
under this Act’’ and inserting the following: 
‘‘(c) RECORDKEEPING; CLASSIFICATION; NOTICE.— 
‘‘(1) RECORDKEEPING.—Every person subject 
to any provision of this Act or of any order issued 
under this Act’’; and 
(2) by adding at the end the following: 
‘‘(2) CLASSIFICATION.— 
VerDate Mar 15 2010 
20:16 May 16, 2014
Jkt 039200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H4611.IH
H4611
TKELLEY on DSK3SPTVN1PROD with BILLS
‘‘(A) IN GENERAL.—Every person (includ-
ing every employer and enterprise), who em-
ploys any employee engaged in commerce or in 
the production of goods for commerce or en-
gages any non-employee engaged in commerce 
or in the production of goods for commerce, 
shall— 
‘‘(i) accurately classify each covered 
individual as an employee or a non-em-
ployee (as the case may be); 
‘‘(ii) provide, to each covered indi-
vidual, a written notice that— 
‘‘(I) informs the covered indi-
vidual of the classification of such in-
dividual, by the person submitting the 
notice, as an employee or a non-em-
ployee; 
‘‘(II) includes a statement direct-
ing such individual to the Department 
of Labor website established under 
section 3 of the Payroll Fraud Pre-
vention Act of 2014, or other appro-
priate resources, for the purpose of 
providing further information about 
the legal rights of an employee; 
VerDate Mar 15 2010 
20:16 May 16, 2014
Jkt 039200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H4611.IH
H4611
TKELLEY on DSK3SPTVN1PROD with BILLS
‘‘(III) includes the address and 
telephone number for the applicable 
local office of the Department of 
Labor; and 
‘‘(IV) includes for each covered 
individual classified as a non-employee 
by the person providing the notice, the 
following statement: ‘Your rights to 
wage, hour, and other labor protec-
tions depend upon your proper classi-
fication as an employee or a non-em-
ployee. If you have any questions or 
concerns about how you have been 
classified or suspect that you may 
have been misclassified, contact the 
U.S. Department of Labor.’; and 
‘‘(iii) maintain a copy of such notice 
as a required record under paragraph (1). 
‘‘(B) TIMING OF NOTICE.— 
‘‘(i) IN
GENERAL.—The notice de-
scribed in subparagraph (A)(ii) shall be 
provided, at a minimum, to each covered 
individual not later than 6 months after 
the date of enactment of the Payroll Fraud 
Prevention Act of 2014, and thereafter— 
VerDate Mar 15 2010 
20:16 May 16, 2014
Jkt 039200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H4611.IH
H4611
TKELLEY on DSK3SPTVN1PROD with BILLS
‘‘(I) for each new employee, upon 
employment; and 
‘‘(II) for each new non-employee, 
upon commencement of the labor or 
services provided by the non-employee. 
‘‘(ii) CHANGE IN STATUS.—Each per-
son required to provide a notice under sub-
paragraph (A)(ii) to a covered individual 
shall also provide such notice to such indi-
vidual upon changing the status of such in-
dividual as an employee or a non-employee. 
‘‘(C) PRESUMPTION.— 
‘‘(i) IN
GENERAL.—For purposes of 
this Act and the regulations or orders 
issued under this Act, a covered individual 
to whom a person is required to provide a 
notice under subparagraph (A)(ii) shall be 
presumed to be an employee of the person 
if the person has not provided the indi-
vidual with such notice within the time re-
quired under subparagraph (B). 
‘‘(ii) REBUTTAL.—The presumption 
under clause (i) shall be rebutted only 
through the presentation of clear and con-
vincing evidence that a covered individual 
VerDate Mar 15 2010 
20:16 May 16, 2014
Jkt 039200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H4611.IH
H4611
TKELLEY on DSK3SPTVN1PROD with BILLS
described in such subparagraph is not an 
employee of the person.’’. 
(c) SPECIAL PROHIBITED ACTS.—Section 15(a) of 
the Fair Labor Standards Act of 1938 (29 U.S.C. 215(a)) 
is amended— 
(1) by striking paragraph (3) and inserting the 
following: 
‘‘(3) to discharge or in any other manner dis-
criminate against any covered individual (including 
an employee) because such individual has— 
‘‘(A) opposed any practice, filed any peti-
tion or complaint, or instituted or caused to be 
instituted any proceeding— 
‘‘(i) under or related to this Act (in-
cluding concerning the status of a covered 
individual as an employee or a non-em-
ployee for purposes of this Act); or 
‘‘(ii) concerning the status of a cov-
ered individual as an employee or a non- 
employee for employment tax purposes 
within the meaning of subtitle C of the In-
ternal Revenue Code of 1986; 
‘‘(B) testified or is about to testify in any 
proceeding described in subparagraph (A); or 
VerDate Mar 15 2010 
20:16 May 16, 2014
Jkt 039200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H4611.IH
H4611
TKELLEY on DSK3SPTVN1PROD with BILLS
‘‘(C) served, or is about to serve, on an in-
dustry committee;’’; 
(2) in paragraph (5), by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(6) to wrongly classify an employee of the per-
son as a non-employee in accordance with section 
11(c)(2).’’. 
(d) 
SPECIAL
PENALTY
FOR
CERTAIN 
MISCLASSIFICATION, RECORDKEEPING, AND NOTICE VIO-
LATIONS.—Section 16 of the Fair Labor Standards Act 
of 1938 (29 U.S.C. 216) is amended— 
(1) in subsection (b)— 
(A) in the sixth sentence, by striking ‘‘any 
employee’’ each place the term occurs and in-
serting ‘‘any covered individual’’; 
(B) in the fourth sentence— 
(i) by striking ‘‘employees’’ and in-
serting ‘‘covered individual’’; and 
(ii) by striking ‘‘he gives his consent’’ 
and inserting ‘‘such covered individual con-
sents’’; 
(C) in the third sentence— 
VerDate Mar 15 2010 
20:16 May 16, 2014
Jkt 039200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H4611.IH
H4611
TKELLEY on DSK3SPTVN1PROD with BILLS
(i) by striking ‘‘either of the preceding 
sentences’’ and inserting ‘‘any of the pre-
ceding sentences’’; 
(ii) by striking ‘‘one or more employ-
ees’’ and inserting ‘‘one or more covered 
individuals’’; and 
(iii) by striking ‘‘in behalf of himself 
or themselves and other employees’’ and 
inserting ‘‘on behalf of such covered indi-
vidual or individuals and other covered in-
dividuals’’; and 
(D) by inserting after the first sentence 
the following: ‘‘Such liquidated damages are 
doubled (subject to section 11 of the Portal-to- 
Portal Act of 1947 (29 U.S.C. 260)) where, in 
addition to violating the provisions of section 6 
or 7, the employer has violated the provisions of 
section 15(a)(6) with respect to such employee 
or employees.’’; and 
(2) in subsection (e), by striking paragraph (2) 
and inserting the following: 
‘‘(2) Any person who violates section 6, 7, 11(c), or 
15(a)(6) shall be subject to a civil penalty, for each em-
ployee or other individual who was the subject of such a 
violation, in an amount— 
VerDate Mar 15 2010 
20:16 May 16, 2014
Jkt 039200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H4611.IH
H4611
TKELLEY on DSK3SPTVN1PROD with BILLS
‘‘(A) not to exceed $1,100; or 
‘‘(B) in the case of a person who has repeatedly 
or willfully committed such violation, not to exceed 
$5,000.’’. 
SEC. 3. EMPLOYEE RIGHTS WEBSITE. 
Not later than 180 days after the date of enactment 
of this Act, the Secretary of Labor shall establish a single 
webpage on the Department of Labor website that sum-
marizes in plain language the rights of employees and non- 
employees under the Fair Labor Standards Act of 1938 
(29 U.S.C. 201 et seq.), including the rights described in 
the amendments made by section 2. 
SEC. 4. MISCLASSIFICATION OF EMPLOYEES FOR UNEM-
PLOYMENT COMPENSATION PURPOSES. 
(a) IN GENERAL.—Section 303(a) of the Social Secu-
rity Act (42 U.S.C. 503(a)) is amended— 
(1) in paragraph (11)(B), by striking the period 
and inserting ‘‘; and’’; 
(2) in paragraph (12), by striking the period 
and inserting ‘‘; and’’; and 
(3) by adding after paragraph (12) the fol-
lowing: 
‘‘(13)(A) Such auditing and investigative proce-
dures as may be necessary to identify employers that 
have not registered under the State law or that are 
VerDate Mar 15 2010 
20:16 May 16, 2014
Jkt 039200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H4611.IH
H4611
TKELLEY on DSK3SPTVN1PROD with BILLS