Modern Worker Empowerment Act

Key Points

• This bill changes how the federal government decides whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). It replaces the current broad "suffer or permit" standard with the narrower common law test, which focuses on how much control a company has over a worker.
• The bill adds language to the FLSA's definition of "employee" so that worker status is determined using traditional common law rules rather than the existing, more expansive test. This makes it easier for companies to classify workers as independent contractors.
• The bill also narrows the definition of "employ" in the FLSA. Currently, "employ" means to "suffer or permit to work," which is one of the broadest definitions in federal labor law. The amendment limits this by specifying it applies only to an "employee" as newly defined.
• Workers reclassified as independent contractors would lose FLSA protections including the federal minimum wage ($7.25/hour) and overtime pay requirements (time-and-a-half after 40 hours). This could affect millions of workers in the gig economy and other industries where classification is currently disputed.
• The bill was introduced by Senator Tim Scott of South Carolina and has been referred to the Senate Committee on Health, Education, Labor, and Pensions. It would need to pass both chambers of Congress and be signed by the president to become law.