21st Century Worker Act

Clear Choices for Workers: Under Section 105(a), workers who do not automatically fall into a mandatory employee or independent contractor category are given the ability to choose whether they want to be classified as an employee or an independent contractor. This gives everyday people the freedom to pick the working style that best fits their personal needs.

Default Protection for Workers: Under Section 105(f), if a worker makes an election to be an independent contractor but the hiring company fails to sign the paperwork within 14 days, the worker is automatically classified as an independent contractor and is protected from facing penalties for the company's lack of response.

Study on Federal Laws: Under Section 204(a), the Comptroller General is required to study and report to Congress on how harmonizing these worker definitions will alter other covered Federal laws. This provides accountability and transparency for the public regarding how these changes ripple across government programs.

Penalties for Paperwork Mistakes: Under Section 105(g)(1) and Section 105(g)(2), the Secretary of Labor is required to impose penalties of up to $100 on workers who fail to make their classification election within 14 days, or on workers and companies who fail to keep copies of the signed election paperwork for three years. This can burden everyday workers with fines for simple administrative errors.

Misclassification Fines: Under Section 105(g)(3), the Secretary of Labor must impose a penalty on companies or workers responsible for a classification determination who willfully or recklessly misclassify a service provider payee as an independent contractor, set at 15 percent of the compensation paid. While meant to deter bad behavior, this could lead to financial stress for smaller operations caught up in complex classification rules.