I 
115TH CONGRESS 
1ST SESSION H. R. 3629 
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 
JULY 28, 2017 
Ms. WILSON of Florida introduced the following bill; which was referred to 
the Committee on Education and the Workforce, and in addition to the 
Committee on Ways and Means, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration 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 2017’’. 
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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) has been 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 
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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 were 
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.—Every person (includ-
ing every employer and enterprise), who employs any 
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employee engaged in commerce or in the production 
of goods for commerce or engages any non-employee 
engaged in commerce or in the production of goods 
for commerce, shall accurately classify each covered 
individual as an employee or a non-employee (as the 
case may be). 
‘‘(3) NOTICE.— 
‘‘(A) IN GENERAL.—Every person subject 
to any provision of this Act or of any order 
issued under this Act shall provide the notice 
described in subparagraph (C) to each employee 
of the person and each individual classified by 
the person as a non-employee under paragraph 
(2) and maintain a copy of such notice as a re-
quired record under paragraph (1). 
‘‘(B) TIMING OF NOTICE.— 
‘‘(i) IN
GENERAL.—The notice de-
scribed in subparagraph (A) shall be pro-
vided, at a minimum, to each covered indi-
vidual not later than 6 months after the 
date of enactment of the Payroll Fraud 
Prevention Act of 2017, and thereafter— 
‘‘(I) for each new employee, upon 
employment; and 
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‘‘(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) to a covered individual shall 
also provide such notice to such individual 
upon changing the status of such indi-
vidual as an employee or a non-employee. 
‘‘(C) CONTENTS OF NOTICE.—The notice 
required under this paragraph shall be in writ-
ing and shall— 
‘‘(i) inform the covered individual of 
the classification of such individual, by the 
person submitting the notice, as an em-
ployee or a non-employee; 
‘‘(ii) include a statement directing 
such individual to the Department of 
Labor website established under section 3 
of the Payroll Fraud Prevention Act of 
2017, for the purpose of providing further 
information about the legal rights of an 
employee; 
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