I 
116TH CONGRESS 
1ST SESSION H. R. 1625 
To amend the Internal Revenue Code of 1986 to provide a safe harbor 
for determinations of worker classification, to require increased reporting, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 7, 2019 
Mr. RICE of South Carolina introduced the following bill; which was referred 
to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
a safe harbor for determinations of worker classification, 
to require increased reporting, 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 ‘‘New Economy Works 
to Guarantee Independence and Growth Act of 2019’’ or 
the ‘‘NEW GIG Act of 2019’’. 
VerDate Sep 11 2014 
21:42 Mar 22, 2019
Jkt 089200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H1625.IH
H1625
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(A) meets the requirements of paragraph 
(2) with respect to such service, or 
‘‘(B) in the case of a service provider en-
gaged in the trade or business of selling (or so-
liciting the sale of) goods or services, meets the 
requirements of paragraph (3) with respect to 
such service. 
‘‘(2) GENERAL REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The requirements of 
this paragraph are met with respect to any 
service if the service provider, in connection 
with performing the service— 
‘‘(i) incurs expenses— 
‘‘(I) which are deductible under 
section 162, and 
‘‘(II) a significant portion of 
which are not reimbursed, 
‘‘(ii) agrees to perform the service for 
a particular amount of time, to achieve a 
specific result, or to complete a specific 
task, and 
‘‘(iii) satisfies not less than one of the 
factors described in subparagraph (B). 
‘‘(B) FACTORS.—The factors described in 
this subparagraph are the following: 
VerDate Sep 11 2014 
21:42 Mar 22, 2019
Jkt 089200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H1625.IH
H1625
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(i) The service provider has a signifi-
cant investment in assets or training which 
are applicable to the service performed. 
‘‘(ii) The service provider is not re-
quired to perform services exclusively for 
the service recipient or payor. 
‘‘(iii) The service provider has not 
been treated as an employee by the service 
recipient or payor for substantially the 
same services during the 1-year period 
ending with the date of the commencement 
of services under the contract described in 
subsection (d). 
‘‘(iv) The service provider is not com-
pensated on a basis which is tied primarily 
to the number of hours actually worked. 
‘‘(3) ALTERNATIVE REQUIREMENTS WITH RE-
SPECT TO SALES PERSONS.—In the case of a service 
provider engaged in the trade or business of selling 
(or soliciting the sale of) goods or services, the re-
quirements of this paragraph are met with respect 
to any service provided in the ordinary course of 
such trade or business if— 
‘‘(A) the service provider is compensated 
primarily on a commission basis, and 
VerDate Sep 11 2014 
21:42 Mar 22, 2019
Jkt 089200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H1625.IH
H1625
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(B) substantially all the compensation for 
such service is directly related to sales of goods 
or services rather than to the number of hours 
worked. 
‘‘(c) PLACE OF BUSINESS OR OWN EQUIPMENT RE-
QUIREMENT.—The requirement of this subsection is met 
with respect to any service if the service provider— 
‘‘(1) has a principal place of business, 
‘‘(2) does not provide the service primarily in 
the service recipient’s place of business, 
‘‘(3) pays a fair market rent for use of the serv-
ice recipient’s or payor’s place of business, or 
‘‘(4) provides the service primarily using equip-
ment supplied by the service provider. 
‘‘(d) WRITTEN CONTRACT REQUIREMENT.—The re-
quirements of this subsection are met with respect to any 
service if such service is performed pursuant to a written 
contract between the service provider and the service re-
cipient or payor, whichever is applicable, which meets the 
following requirements: 
‘‘(1) The contract includes each of the fol-
lowing: 
‘‘(A) The service provider’s name, taxpayer 
identification number, and address. 
VerDate Sep 11 2014 
21:42 Mar 22, 2019
Jkt 089200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H1625.IH
H1625
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(B) A statement that the service provider 
will not be treated as an employee with respect 
to the services provided pursuant to the con-
tract for purposes of this title. 
‘‘(C) A statement that the service recipient 
or payor will withhold upon and report to the 
Internal Revenue Service the compensation pay-
able pursuant to the contract consistent with 
the requirements of this title. 
‘‘(D) A statement that the service provider 
is responsible for payment of Federal, State, 
and local taxes, including self-employment 
taxes, on compensation payable pursuant to the 
contract. 
‘‘(E) A statement that the contract is in-
tended to be considered a contract described in 
this subsection. 
The contract shall not fail to meet the requirements 
of this paragraph merely because the information 
described in subparagraph (A) is collected at the 
time payment is made for the services and not in ad-
vance, or because the contract provides that an 
agent of the service recipient or payor will fulfill any 
of the responsibilities of the service recipient or 
payor described in the preceding subparagraphs. 
VerDate Sep 11 2014 
21:42 Mar 22, 2019
Jkt 089200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H1625.IH
H1625
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(2) The term of the contract does not exceed 
2 years. The preceding sentence shall not prevent 
one or more subsequent written renewals of the con-
tract from satisfying the requirements of this sub-
section if the term of each such renewal does not ex-
ceed 2 years and if the information required under 
paragraph (1)(A) is updated in connection with each 
such renewal. 
‘‘(3) The contract (or renewal) is signed (which 
may include signatures in electronic form) by the 
service recipient or payor and the service provider 
not later than the date on which the aggregate pay-
ments made by the service recipient or payor to the 
service provider exceeds $1,000 for the year covered 
by the contract (or renewal). 
‘‘(e) REPORTING REQUIREMENTS.— 
‘‘(1) IN
GENERAL.—For purposes of making 
any determination with respect to the liability of a 
service recipient or payor for any tax during any 
taxable year with respect to a service provider, the 
application of this section shall be conditioned on ei-
ther the service recipient or the payor satisfying the 
reporting requirements applicable to such service re-
cipient or payor under section 6041(a), 6041A(a), or 
VerDate Sep 11 2014 
21:42 Mar 22, 2019
Jkt 089200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H1625.IH
H1625
pamtmann on DSKBFK8HB2PROD with BILLS
6050W with respect to such service provider for 
such period. 
‘‘(2) REASONABLE
CAUSE.—For purposes of 
paragraph (1), such reporting requirements shall be 
treated as met if the failure to satisfy such require-
ments is due to reasonable cause and not willful ne-
glect. 
‘‘(f) EXCEPTION
FOR
SERVICES
PROVIDED
BY 
OWNER.—This section shall not apply with respect to any 
service provided by a service provider to a service recipient 
or payor if the service provider owns any interest in the 
service recipient or the payor with respect to the service 
provided. The preceding sentence shall not apply in the 
case of a service recipient or payor the stock of which is 
regularly traded on an established securities market. 
‘‘(g) LIMITATION
ON RECLASSIFICATION
BY SEC-
RETARY.—For purposes of this title— 
‘‘(1) EFFECT OF RECLASSIFICATION ON SERV-
ICE RECIPIENTS AND PAYORS.—A determination by 
the Secretary that a service recipient or a payor 
should have treated a service provider as an em-
ployee shall be effective with respect to the service 
recipient or payor no earlier than the notice date 
if— 
VerDate Sep 11 2014 
21:42 Mar 22, 2019
Jkt 089200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H1625.IH
H1625
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(A) the service recipient or the payor en-
tered into a written contract with the service 
provider which meets the requirements of sub-
section (d), 
‘‘(B) the service recipient or the payor sat-
isfied the applicable reporting requirements of 
section 6041(a), 6041A(a), or 6050W for all 
relevant taxable years with respect to the serv-
ice provider, 
‘‘(C) the service recipient or the payor col-
lected and paid over all applicable taxes im-
posed under subtitle C for all relevant taxable 
years with respect to the service provider, and 
‘‘(D) the service recipient or the payor 
demonstrates a reasonable basis for having de-
termined that the service provider should not be 
treated as an employee under this section and 
that such determination was made in good 
faith. 
‘‘(2) EFFECT OF RECLASSIFICATION ON SERV-
ICE PROVIDERS.—A determination by the Secretary 
that a service provider should have been treated as 
an employee shall be effective with respect to the 
service provider no earlier than the notice date if— 
VerDate Sep 11 2014 
21:42 Mar 22, 2019
Jkt 089200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H1625.IH
H1625
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(A) the service provider entered into a 
written contract with the service recipient or 
the payor which meets the requirements of sub-
section (d), 
‘‘(B) the service provider satisfied the ap-
plicable reporting requirements of sections 
6012(a) and 6017 for all relevant taxable years 
with respect to the service recipient or the 
payor, and 
‘‘(C) the service provider demonstrates a 
reasonable basis for determining that the serv-
ice provider is not an employee under this sec-
tion and that such determination was made in 
good faith. 
‘‘(3) NOTICE DATE.—For purposes of this sub-
section, the term ‘notice date’ means the 30th day 
after the earliest of— 
‘‘(A) the date on which the first letter of 
proposed deficiency which allows the service 
provider, the service recipient, or the payor an 
opportunity for administrative review in the In-
ternal Revenue Service Office of Appeals is 
sent, 
‘‘(B) the date on which a deficiency notice 
under section 6212 is sent, or 
VerDate Sep 11 2014 
21:42 Mar 22, 2019
Jkt 089200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H1625.IH
H1625
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(C) the date on which a notice of deter-
mination under section 7436(b)(2) is sent. 
‘‘(4) REASONABLE CAUSE EXCEPTION.—The re-
quirements of paragraphs (1)(B), (1)(C), and (2)(B) 
shall be treated as met if the failure to satisfy such 
requirements is due to reasonable cause and not 
willful neglect. 
‘‘(5) NO RESTRICTION ON ADMINISTRATIVE OR 
JUDICIAL REVIEW.—Nothing in this subsection shall 
be construed as limiting any provision of law which 
provides an opportunity for administrative or judi-
cial review of a determination by the Secretary. 
‘‘(h) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed as— 
‘‘(1) limiting the ability or right of a service 
provider, service recipient, or payor to apply any 
other provision of this title, section 530 of the Rev-
enue Act of 1978, or any common law rules for de-
termining whether an individual is an employee, or 
‘‘(2) establishing a prerequisite for the applica-
tion of any provision of law described in paragraph 
(1). 
‘‘(i) DEFINITIONS.—For purposes of this section— 
‘‘(1) SERVICE PROVIDER.— 
VerDate Sep 11 2014 
21:42 Mar 22, 2019
Jkt 089200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H1625.IH
H1625
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(A) IN GENERAL.—The term ‘service pro-
vider’ means any qualified person who performs 
service for another person. 
‘‘(B) 
QUALIFIED
PERSON.—The 
term 
‘qualified person’ means— 
‘‘(i) any natural person, or 
‘‘(ii) any entity if any of the services 
referred to in subparagraph (A) are per-
formed by one or more natural persons 
who directly own interests in such entity. 
‘‘(2) SERVICE RECIPIENT.—The term ‘service 
recipient’ means the person for whom the service 
provider performs such service. 
‘‘(3) PAYOR.—The term ‘payor’ means— 
‘‘(A) any person, including the service re-
cipient, who pays the service provider for per-
forming such service, or 
‘‘(B) any marketplace platform, as defined 
in section 6050W(d)(3)(C). 
‘‘(j) REGULATIONS.—Notwithstanding section 530(d) 
of the Revenue Act of 1978, the Secretary shall issue such 
regulations as the Secretary determines are necessary to 
carry out the purposes of this section.’’. 
(b) VOLUNTARY WITHHOLDING AGREEMENTS AND 
WORKER CLASSIFICATION.—Section 3402(p) of the Inter-
VerDate Sep 11 2014 
21:42 Mar 22, 2019
Jkt 089200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H1625.IH
H1625
pamtmann on DSKBFK8HB2PROD with BILLS
nal Revenue Code of 1986 is amended by adding at the 
end the following new paragraph: 
‘‘(4) WORKER
CLASSIFICATION.—Agreements 
under paragraph (3) shall not be taken into account 
in determining whether any party to such agreement 
is an employee or an employer for purposes of this 
title.’’. 
(c) WITHHOLDING BY PAYOR IN CASE OF CERTAIN 
PERSONS CLASSIFIED
AS NOT EMPLOYEES.—Section 
3402 of the Internal Revenue Code of 1986 is amended 
by adding at the end the following new subsection: 
‘‘(u) EXTENSION OF WITHHOLDING TO PAYMENTS 
TO CERTAIN PERSONS CLASSIFIED
AS NOT EMPLOY-
EES.— 
‘‘(1) IN GENERAL.—For purposes of this chap-
ter and so much of subtitle F as relates to this chap-
ter, compensation paid pursuant to a contract de-
scribed in section 7706(d) shall be treated as if it 
were a payment of wages by an employer to an em-
ployee. 
‘‘(2) AMOUNT WITHHELD.—Except as otherwise 
provided under subsection (i), the amount to be de-
ducted and withheld pursuant to paragraph (1) with 
respect to compensation paid pursuant to any such 
contract during any calendar year shall be an 
VerDate Sep 11 2014 
21:42 Mar 22, 2019
Jkt 089200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H1625.IH
H1625
pamtmann on DSKBFK8HB2PROD with BILLS
amount equal to 5 percent of so much of the amount 
of such compensation as does not exceed $20,000.’’. 
(d) DIRECT
SELLERS
OF
PROMOTIONAL
PROD-
UCTS.—Subsection (b) of section 3508 of the Internal 
Revenue Code of 1986 is amended— 
(1) in paragraph (2)(A)— 
(A) in clause (ii), by striking ‘‘or’’ at the 
end; 
(B) in clause (iii), by adding ‘‘or’’ at the 
end; and 
(C) by inserting after clause (iii) the fol-
lowing new clause: 
‘‘(iv) is engaged in the trade or busi-
ness of selling, or soliciting the sale of, 
promotional products from other than a 
permanent retail establishment,’’; 
(2) by redesignating paragraph (3) as para-
graph (4); and 
(3) by inserting after paragraph (2) the fol-
lowing new paragraph: 
‘‘(3) PROMOTIONAL
PRODUCT.—For purposes 
of paragraph (2)(A)(iv), the term ‘promotional prod-
uct’ means a tangible item with permanently marked 
promotional words, symbols, or art of the pur-
chaser.’’. 
VerDate Sep 11 2014 
21:42 Mar 22, 2019
Jkt 089200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H1625.IH
H1625
pamtmann on DSKBFK8HB2PROD with BILLS