21st Century Worker Act

Summary

Creates a single, federal set of definitions and objective tests to decide when a worker is an employee, an independent contractor, or eligible for an elective contractor classification. It standardizes terms like "employer," "employee," "compensation," and "independent contractor," sets criteria for a "formal bona fide contractor," and aligns labor-law definitions with the Internal Revenue Code and direct-seller rules. It also revises language in major labor statutes to point to the new common definition, changing how wage, labor-organizing, and other employment laws determine coverage and responsibilities.

• Establishes a single, common federal set of definitions and tests for employee vs. independent-contractor status.
• Creates objective criteria for a "formal bona fide contractor," including contract form, unreimbursed expense thresholds, and prior relationship limits.
• Defines new categories such as elective classification service providers and formal bona fide contractors to govern classification choices.
• Aligns labor-law definitions with the Internal Revenue Code and existing direct-seller tax rules to reduce mismatches between tax and labor classifications.
• Amends key labor statutes to cross-reference the new common definition of employer/employee and adds an explicit statutory definition of "employment."
• Changes affect coverage of wage-and-hour protections, collective bargaining eligibility, payroll taxes, and benefits eligibility.
• No dedicated funding or effective-date language is specified in the provided text.
• Will likely increase compliance burdens for employers and platforms and generate administrative and legal disputes as new standards are applied.