Bill Introduced to Harmonize the Definition of Employee for Federal Statutes

This bill represents the final act for Congress to finish its work on harmonizing the definition of employee.

The Coalition to Promote Independent Entrepreneurs applauds Representatives Diane Black (R-TN) and Elise Stefanik (R-NY) for introducing the Harmonization of Coverage Act of 2017, H.R. 3825. The bill will reduce the patchwork of different tests currently used to define the term employee for purposes of federal and state laws, by harmonization the term’s definition for purposes of federal statutes.

Harmonization of the term employee for purposes of federal statutes will protect self-employed entrepreneurs and their clients against having to re-litigate the status of their relationship for purposes of different federal statutes that define the term differently. It also will enable the government to more efficiently ensure proper worker classification.

The patchwork of different tests for the term employee is largely attributable to the New Deal era when the U.S. Supreme Court adopted expansive interpretations of the intended coverage of the Social Security Act of 1935 (“SSA”), the National Labor Relations Act of 1935 (“NLRA”), and the Fair Labor Standards Act of 1938 (“FLSA”). The Congress subsequently amended the SSA and NLRA to adopt a common-law test, but has not yet amended the FLSA. Decades later, the U.S. Supreme Court issued several landmark decisions holding that the common-law test applies for purposes of a statute that does not define the term “employee,” or defines it with a definition that is circular. The FLSA remains the only New Deal statue, of the three, that the Congress has not yet amended to adopt a common-law test. By passing the Harmonization of Coverage Act of 2017, the Congress will finish its work toward achieving complete harmonization of the definition of employee for purposes of federal laws.

“This bill represents the final act for Congress to finish its work on harmonizing the definition of employee,” said Coalition Executive Director Russell Hollrah. “We applaud Representatives Black and Stefanik for introducing this bill to bring much-needed certainty and consistency to this term for purposes of federal statutes. We urge Congress to act quickly and pass this bill.”

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