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Washington Labor & Employment Wire » Fair Playing Field Act of 2010 (H.R. 6128, S. 3786)

Fair Playing Field Act of 2010 (H.R. 6128, S. 3786)


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Core Provisions: This legislation would amend the Internal Revenue Code (the Tax Code) to strengthen both guidance regarding classification of workers as independent contractors and the tax penalties faced by employers who misclassify their employees.

The bill ends the current moratorium on Internal Revenue Service (IRS) guidance regarding worker misclassification while also requiring that the Treasury (1) issue prospective guidance clarifying the employment status of individuals for the purpose of federal employment taxes and (2) issue annual reports on worker misclassification. The bill also amends those provisions of the Tax Code providing for reduced penalties for an employer’s failure to deduct and withhold income taxes and the employee’s share of Federal Insurance Contributions Act taxes. Finally, the bill would require that any person who contracts for the services of independent contractors on a “regular and ongoing basis” provide a written statement to each independent contractor notifying them of (1) the federal tax obligations of an independent contractor, (2) the labor and employment law protections that do not apply to independent contractors, and (3) the right of the independent contractor to seek a status determination from the IRS.

The White House has indicated its support for the bill, as Vice President Joe Biden hailed the legislation as “timely” upon its introduction in the House and the Senate.

Status:  H.R. 6128 was introduced by Rep. Jim McDermott (D-WA) on September 15, 2010, and referred to the House Committee on Ways and Means. S. 3786 was introduced by Sen. John Kerry (D-MA) on September 15, 2010 and referred to the Senate Committee on Finance. The Employee Misclassification Prevention Act, H.R. 5107, S. 3254, introduced by Rep. Woolsey (D-CA) and Sen. Brown (D-OH), also seeks to address independent contractor misclassification through an amendment to the Fair Labor Standards Act.