,,ii  #aacth ,,congress  #ast ,session  
,s4 #afhg  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,november #ab1 
#bjac,mr4 ,casey 7for himself1 ,mr4     
,brown1 ,mr4 ,harkin1 and ,mr4 ,franken7
 introduced the following bill2 which   
was read twice and referred to the      
,committee on ,health1 ,education1      
,labor1 and ,pensions  ,a ,,bill  ,to   
amend the ,fair ,labor ,standards ,act  
of #aich to ensure that employees are   
not misclassified as non-employees1 and 
for other purposes4  #a4 ,short title   
,this ,act may be cited as the ,payroll 
,fraud ,prevention ,act of #bjac4  #b4  
,classification of employees and        
non-employees  7a7 ,definitions ,section
 #c of the ,fair ,labor ,standards ,act 
of #aich 7#bi ,u4,s4,c4 #bjc7 is amended
 by adding at the end the following3    
7z7 ,non-employee means an individual   
who-- 7#a7 a person has engaged1 in the 
course of the trade or business of the  
person1 for the performance of labor or 
services2 and  7#b7 is not an employee  

of the person4  7aa7 ,covered individual
 when used with respect to an employer  
or other person means-- 7#a7 an employee
 of the employer2 or  7#b7 a            
non-employee of the person 7including a 
person who is an employer7-- 7,a7 whom  
the person has engaged1 in the course of
 the trade or business of the person1   
for the performance of labor or         
services2 and  7,b7 7i7 with respect to 
whom the person is required to file an  
information return under section        
#fjda;,a7a7 of the ,internal ,revenue   
,code of #aihf2 or  7ii7 who is         
providing labor or services to the      
person through an entity that is a      
trust1 estate1 partnership1 association1
 company1 or corporation 7as such terms 
are used in section #ggja7;a77#a7 of the
 ,internal ,revenue ,code of #aihf7 if--
 7,i7 such individual has an ownership  
interest in the entity2  7,,ii7 creation
 or maintenance of such entity is a     
condition for the provision of such     
labor or services to the person2 and    

7,,iii7 the person would be required to 
file an information return for the      
entity under section #fjda;,a7a7 of the 
,internal ,revenue ,code of #aihf if the
 entity was an individual4  4  7b7      
,classification as employees ,section   
#aa7;c7 of the ,fair ,labor ,standards  
,act of #aich 7#bi ,u4,s4,c4 #baa7;c77  
is amended-- 7#a7 by striking 7c7 ,every
 employer subject to any provision of   
this ,act or of any order issued under  
this ,act and inserting the following3  
7c7 ,recordkeeping2 classification2     
notice  7#a7 ,recordkeeping ,every      
person subject to any provision of this 
,act or of any order issued under this  
,act  2 and  7#b7 by adding at the end  
the following3  7#b7 ,classification    
7,a7 ,in general ,every person          
7including every employer and           
enterprise71 who employs any 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 commerce1   

shall-- 7i7 accurately classify each    
covered individual as an employee or a  
non-employee 7as the case may be72  7ii7
 provide1 to each covered individual1 a 
written notice that-- 7,i7 informs the  
covered individual of the classification
 of such individual1 by the person      
submitting the notice1 as an employee or
 a non-employee2  7,,ii7 includes a     
statement directing such individual to  
the ,department of ,labor website       
established under section #c of the     
,payroll ,fraud ,prevention ,act of     
#bjac1 or other appropriate resources1  
for the purpose of providing further    
information about the legal rights of an
 employee2  7,,iii7 includes the address
 and telephone number for the applicable
 local office of the ,department of     
,labor2 and  7,,iv7 includes for each   
covered individual classified as a      
non-employee by the person providing the
 notice1 the following statement3 ,your 
rights to wage1 hour1 and other labor   
protections depend upon your proper     

classification as an employee or a      
non-employee4 ,if you have any questions
 or concerns about how you have been    
classified or suspect that you may have 
been misclassified1 contact the ,u4,s4  
,department of ,labor42 and  7iii7      
maintain a copy of such notice as a     
required record under paragraph 7#a74   
7,b7 ,timing of notice  7i7 ,in general 
,the notice described in subparagraph   
7,a77ii7 shall be provided1 at a        
minimum1 to each covered individual not 
later than #f months after the date of  
enactment of the ,payroll ,fraud        
,prevention ,act of #bjac1 and          
thereafter-- 7,i7 for each new employee1
 upon employment2 and  7,,ii7 for each  
new non-employee1 upon commencement of  
the labor or services provided by the   
non-employee4  7ii7 ,change in status   
,each person required to provide a      
notice under subparagraph 7,a77ii7 to a 
covered individual shall also provide   
such notice to such individual upon     
changing the status of such individual  

as an employee or a non-employee4  7,c7 
,presumption  7i7 ,in general ,for      
purposes of this ,act and the           
regulations or orders issued under this 
,act1 a covered individual to whom a    
person is required to provide a notice  
under subparagraph 7,a77ii7 shall be    
presumed to be an employee of the person
 if the person has not provided the     
individual with such notice within the  
time required under subparagraph 7,b74  
7ii7 ,rebuttal ,the presumption under   
clause 7i7 shall be rebutted only       
through the presentation of clear and   
convincing evidence that a covered      
individual described in such            
subparagraph is not an employee of the  
person4  4  7c7 ,special prohibited acts
 ,section #ae7;a7 of the ,fair ,labor   
,standards ,act of #aich 7#bi ,u4,s4,c4 
#bae7;a77 is amended-- 7#a7 by striking 
paragraph 7#c7 and inserting the        
following3  7#c7 to discharge or in any 
other manner discriminate against any   
covered individual 7including an        

employee7 because such individual has-- 
7,a7 opposed any practice1 filed any    
petition or complaint1 or instituted or 
caused to be instituted any proceeding--
 7i7 under or related to this ,act      
7including concerning the status of a   
covered individual as an employee or a  
non-employee for purposes of this ,act72
 or  7ii7 concerning the status of a    
covered individual as an employee or a  
non-employee for employment tax purposes
 within the meaning of subtitle ,c of   
the ,internal ,revenue ,code of #aihf2  
7,b7 testified or is about to testify in
 any proceeding described in            
subparagraph 7,a72 or  7,c7 served1 or  
is about to serve1 on an industry       
committee2  2  7#b7 in paragraph 7#e71  
by striking the period at the end and   
inserting 2 and2 and  7#c7 by adding at 
the end the following3  7#f7 to wrongly 
classify an employee of the person as a 
non-employee in accordance with section 
#aa7;c77#b74  4  7d7 ,special penalty   
for certain misclassification1          

recordkeeping1 and notice violations    
,section #af of the ,fair ,labor        
,standards ,act of #aich 7#bi ,u4,s4,c4 
#baf7 is amended-- 7#a7 in subsection   
7b7-- 7,a7 in the sixth sentence1 by    
striking any employee each place the    
term occurs and inserting any covered   
individual2  7,b7 in the fourth         
sentence-- 7i7 by striking employees and
 inserting covered individual2 and  7ii7
 by striking he gives his consent and   
inserting such covered individual       
consents2  7,c7 in the third sentence-- 
7i7 by striking either of the preceding 
sentences and inserting any of the      
preceding sentences2  7ii7 by striking  
one or more employees and inserting one 
or more covered individuals2 and  7iii7 
by striking in behalf of himself or     
themselves and other employees and      
inserting on behalf of such covered     
individual or individuals and other     
covered individuals2 and  7,d7 by       
inserting after the first sentence the  
following3 ,such liquidated damages are 

doubled 7subject to section #aa of the  
,portal-to-,portal ,act of #aidg 7#bi   
,u4,s4,c4 #bfj77 where1 in addition to  
violating the provisions of section #f  
or #g1 the employer has violated the    
provisions of section #ae7;a77#f7 with  
respect to such employee or employees42 
and  7#b7 in subsection 7e71 by striking
 paragraph 7#b7 and inserting the       
following3  7#b7 ,any person who        
violates section #f1 #g1 #aa7;c71 or    
#ae7;a77#f7 shall be subject to a civil 
penalty1 for each employee or other     
individual who was the subject of such a
 violation1 in an amount-- 7,a7 not to  
exceed #a1ajj2 or  7,b7 in the case of a
 person who has repeatedly or willfully 
committed such violation1 not to exceed 
#e1jjj4  4  #c4 ,employee rights website
 ,not later than #ahj days after the    
date of enactment of this ,act1 the     
,secretary of ,labor shall establish a  
single webpage on the ,department of    
,labor website that summarizes in plain 
language the rights of employees and    

non-employees under the ,fair ,labor    
,standards ,act of #aich 7#bi ,u4,s4,c4 
#bja et seq471 including the rights     
described in the amendments made by     
section #b4  #d4 ,misclassification of  
employees for unemployment compensation 
purposes  7a7 ,in general ,section      
#cjc7;a7 of the ,social ,security ,act  
7#db ,u4,s4,c4 #ejc7;a77 is amended--   
7#a7 in paragraph 7#aa77;,b71 by        
striking the period and inserting 2 and2
  7#b7 in paragraph 7#ab71 by striking  
the period and inserting 2 and2 and     
7#c7 by adding after paragraph 7#ab7 the
 following3  7#ac7 7,a7 ,such auditing  
and investigative procedures as may be  
necessary to identify employers that    
have not registered under the ,state law
 or that are paying unreported wages1   
where these actions or omissions by the 
employers have the effect of excluding  
employees from unemployment compensation
 coverage2 and  7,b7 the making of      
quarterly reports to the ,secretary of  
,labor 7in such form as the ,secretary  

of ,labor may require7 describing the   
results of the procedures under         
subparagraph 7,a72 and  7#ad7 the       
establishment of administrative         
penalties for misclassifying employees1 
or paying unreported wages to employees 
without proper recordkeeping1 for       
unemployment compensation purposes4  4  
7b7 ,review of auditing programs ,the   
,secretary of ,labor shall include1 in  
the ,department of ,labor's system for  
measuring the performance of ,states in 
conducting unemployment compensation tax
 audits1 a specific measure of the      
effectiveness of ,states in identifying 
the underreporting of wages and the     
underpayment of unemployment            
compensation contributions 7including   
the effectiveness of ,states in         
identifying instances of such           
underreporting or underpayments despite 
the absence of cancelled checks1        
original time sheets1 or other similar  
documentation74  7c7 ,effective date    
7#a7 ,in general ,except as provided in 

paragraph 7#b71 the amendments made by  
subsection 7a7 shall take effect #ab    
months after the date of enactment of   
this ,act4  7#b7 ,exception ,if the     
,secretary of ,labor finds that         
legislation is necessary for the        
unemployment compensation law of a      
,state to comply with the amendments    
made by subsection 7a71 such amendments 
shall not apply with respect to such law
 until the later of-- 7,a7 the day after
 the close of the first regular session 
of the legislature of such ,state that  
begins after the date of enactment of   
this ,act2 or  7,b7 #ab months after the
 date of enactment of this ,act4  7d7   
,definition of ,state ,for purposes of  
this section1 the term ,state has the   
meaning given the term in section       
#ccjf7;j7 of the ,internal ,revenue     
,code of #aihf4  #e4 ,department of     
,labor coordination1 referral1 and      
regulations  7a7 ,coordination and      
referral ,notwithstanding any other     
provision of law1 any office1           

administration1 or division of the      
,department of ,labor that1 while in the
 performance of its official duties1    
obtains information regarding the       
misclassification by a person subject to
 the provisions of the ,fair ,labor     
,standards ,act of #aich 7#bi ,u4,s4,c4 
#bja et seq471 or any order issued under
 such ,act of any individual regarding  
whether such individual is an employee  
or a non-employee engaged in the        
performance of labor or services for    
purposes of section #f or #g of such    
,act 7#bi ,u4,s4,c4 #bjf1 #bjg71 or in  
records required under section #aa7;c7  
of such ,act 7#bi ,u4,s4,c4 #baa7;c771  
shall report such information to the    
,wage and ,hour ,division of the        
,department of ,labor4 ,the ,wage and   
,hour ,division may report such         
information to the ,internal ,revenue   
,service as the ,wage and ,hour         
,division considers appropriate4  7b7   
,regulations ,the ,secretary of ,labor  
shall promulgate regulations to carry   

out this ,act and the amendments made by
 this ,act4  #f4 ,targeted audits ,the  
audits of employers subject to the ,fair
 ,labor ,standards ,act of #aich 7#bi   
,u4,s4,c4 #bja et seq47 that are        
conducted by the ,wage and ,hour        
,division of the ,department of ,labor  
shall include certain industries with   
frequent incidence of misclassifying    
employees as non-employees1 as          
determined by the ,secretary of ,labor4