Worker Flexibility and Choice Act
Bill: H.R.8442 | Sponsor: Rep. Cuellar, Henry (D-TX)
Policy area: Labor and Employment

Summary:
Worker Flexibility and Choice Act
This bill allows employers to offer prospective workers flexibility arrangements that the individual may voluntarily enter before work begins. Under such an arrangement, a worker generally would not be considered an employee under the Fair Labor Standards Act of 1938 or the Internal Revenue Code of 1986.

To provide workers with schedule flexibility and choice, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Worker Flexibility and Choice Act''.

SEC. 2. WORKER FLEXIBILITY AGREEMENTS.

    Section 3 of the Fair Labor Standards Act of 1938 (29 U.S.C. 203) 
is amended--
            (1) in subsection (e), by adding at the end the following:
    ``(6)(A) Except as provided in subparagraph (B), the term 
`employee' does not include any individual who has entered into a 
worker flexibility agreement with an entity during the duration of such 
worker flexibility agreement.
    ``(B) For the purposes of sections 3(l), 12, and 13(c), and 
paragraphs (3) and (4) of section 15(a), the term `employee' includes 
an individual described in subparagraph (A).''; and
            (2) by adding at the end the following:
    ``(z)(1) Worker Flexibility Agreement.--The term `worker 
flexibility agreement' means an arrangement--
            ``(A) that is knowingly and voluntarily entered into by an 
        entity and an individual before work begins, in accordance with 
        paragraph (2);
            ``(B) under which--
                    ``(i) the individual retains the rights provided to 
                employees in connection with other workplace laws, 
                including those relating to individual employee privacy 
                rights, nondiscrimination, nonharassment, 
                nonretaliation, safety, and leave under the Family and 
                Medical Leave Act, in accordance with applicable laws;
                    ``(ii) the individual retains the freedom and 
                flexibility to reject offers the entity provides to the 
                individual to provide services or results without 
                negatively impacting the individual's opportunity to 
                provide services to the entity in the future during the 
                arrangement's term; and
                    ``(iii) the individual retains the right to perform 
                the same services or results as the services or results 
                provided under the arrangement to competing businesses, 
                unless part of a bargained-for non-solicitation sales 
                agreement;
            ``(C) that specifies that the individual entering into the 
        agreement--
                    ``(i) will not be treated as an employee for 
                Federal tax purposes with respect to services performed 
                pursuant to the agreement during the period during 
                which the agreement is in effect; and
                    ``(ii) has not been treated as an employee for 
                Federal tax purposes with respect to the same or 
                similar services performed at any time during the 
                calendar year in which such agreement is entered into 
                by the individual and the entity;
            ``(D) that may include other requirements, if agreed to by 
        the individual and the entity;
            ``(E) that is affirmed in writing and that--
                    ``(i) states the entity has offered, and the 
                individual has chosen to enter into, an arrangement 
                whereby the individual is not subject to the minimum 
                wage and overtime protections of this Act and is not 
                treated as an employee under the Internal Revenue Code 
                of 1986 (and related State and local laws); and
                    ``(ii) includes a statement of all of the rights 
                and requirements described subparagraphs (B) and (C); 
                and
            ``(F) that is for a defined period of time and that may be 
        renewed or renegotiated by the individual and the entity 
        following its expiration in accordance with the requirements of 
        this section.
    ``(2) Knowing and Voluntary Agreement.--For the purposes of this 
subsection, an agreement described in paragraph (1) shall not be 
considered to be entered into knowingly and voluntarily unless the 
agreement--
            ``(A) is written in plain language in a manner that can be 
        understood by the average individual eligible to participate;
            ``(B) specifically refers to rights or claims under this 
        Act;
            ``(C) advises the individual in writing of their right to 
        consult with others, including an attorney, prior to signing 
        the agreement;
            ``(D) confirms that the individual has been provided with a 
        written summary of health, pensions, insurance (including 
        accident or other occupational health products), training, and 
        certification programs, or other benefits, if any, that the 
        individual is eligible for while the agreement is in effect; 
        and
            ``(E) includes the signature of the individual and a 
        representative of the entity.''.

SEC. 3. SUPERSEDURE AND VALIDITY.

    Section 18 of the Fair Labor Standards Act of 1938 (29 U.S.C. 218) 
is amended by adding at the end, the following:
    ``(c) Supersedure and Validity of Worker Flexibility Agreements.--
            ``(1) In general.--Except as otherwise provided in 
        paragraph (2), with respect to any individual who has entered 
        into a worker flexibility agreement, the requirements of 
        subsections (e)(6) and (z) of section 3 shall supersede all 
        Federal, State, and local laws relating to wages and other 
        monies paid, hours worked, documentation and recordkeeping, and 
        applicable taxes, benefits, and contributions insofar as they 
        may apply to the employment relationship between the individual 
        and the entity covered under the worker flexibility agreement.
            ``(2) Revocation.--A worker flexibility agreement shall be 
        valid, irrevocable, and enforceable, except upon such grounds 
        as exist at law or equity for the revocation of any 
        contract.''.

SEC. 4. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986 AND ERISA.

    (a) Treatment Under Internal Revenue Code of 1986.--
            (1) In general.--Chapter 25 of the Internal Revenue Code of 
        1986 is amended by inserting after section 3508 the following 
        new section:

``SEC. 3508A. TREATMENT OF SERVICES PERFORMED UNDER WORKER FLEXIBILITY 
              AGREEMENTS.

    ``(a) General Rule.--For purposes of this title, in the case of 
services performed pursuant to a worker flexibility agreement--
            ``(1) the individual performing such services shall not be 
        treated as an employee; and
            ``(2) the person for whom such services are performed shall 
        not be treated as an employer.
    ``(b) Worker Flexibility Agreement.--For purposes of this section, 
the term `worker flexibility agreement' has the meaning given such term 
under section 3(z) of the Fair Labor Standards Act of 1938 (29 U.S.C. 
203(z)).''.
            (2) Clerical amendment.--The table of sections for chapter 
        25 of such Code is amended by inserting after the item relating 
        to section 3508 the following new item:

``Sec. 3508A. Treatment of services performed under worker flexibility 
                            agreements.''.
    (b) ERISA.--Section 3(40)(A) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1002(40)(A)) is amended--
            (1) in clause (ii), by striking ``or'';
            (2) in clause (iii), by striking the period and inserting 
        ``, and''; and
            (3) by adding at the end the following:
            ``(iv) by an entity for individuals who have entered into a 
        worker flexibility agreement, as defined in section 3(z) of the 
        Fair Labor Standards Act of 1938 (29 U.S.C. 203(z)).''.
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