Modern Worker Security Act

Bill Number

H.R. 1320

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Labor and Employment

Status

Introduced

Latest Action

2026-02-20: Placed on the Union Calendar, Calendar No. 432.

Last Updated

2026-06-11T23:26:40Z

AI-Generated Summary

Purpose

The Modern Worker Security Act (H.R. 1320) aims to clarify how federal laws determine whether a worker is classified as an "employee" of a company or person. Specifically, it prevents the provision of portable benefits—such as health insurance or retirement savings that workers can keep even after leaving a job—from being used as evidence that a worker should be treated as an employee. This supports flexible work arrangements, like those in the gig economy, by allowing companies to offer benefits to independent contractors without risking their reclassification as employees.

Key Provisions

• Prohibition on Considering Benefits: Starting from the date the Act is enacted, no federal law can use the fact that a company provides a benefit to a worker as a factor in deciding if that worker is an employee. This applies across all federal statutes, such as those related to labor rights, taxes, or unemployment insurance.
• Definition of "Benefit": The Act broadly defines a "benefit" to include:
• Portable protections or perks (e.g., skills training or paid leave) that a worker can retain even after stopping work for that company.
• Standard employee benefits like workers' compensation (coverage for job-related injuries), professional development, disability insurance, health coverage, retirement plans, or short-term savings options.
• Any financial or non-financial contributions to these benefits, whether made by the company, the worker, or both, tied to the work performed.

The bill was reported with amendments, including a revised title: "A bill to prohibit the consideration of benefits when determining whether an individual is an employee of a person."

Significant Changes to Existing Law

• Under current federal laws (e.g., the Fair Labor Standards Act or Internal Revenue Code), courts and agencies often use a multi-factor test to classify workers, sometimes considering benefits as a sign of an employer-employee relationship (e.g., if a company provides insurance, it might suggest control over the worker).
• This Act explicitly removes benefits from that analysis, narrowing the criteria for employee status and overriding any prior interpretations that treated benefits as relevant evidence. It does not change other factors, like control over work or financial dependence, but isolates benefits to promote their use without altering classifications.

Potential Impacts

• On Government Agencies: Agencies like the Department of Labor (DOL) and Internal Revenue Service (IRS), which enforce worker classifications, may need to update guidance, regulations, and enforcement practices. This could reduce disputes over misclassification but increase scrutiny on other classification factors.
• On Citizens (Workers and Businesses): Independent contractors and gig workers could gain access to portable benefits without losing their flexible status, potentially improving financial security (e.g., easier access to health coverage). Companies might offer more benefits to attract talent, fostering innovation in work models, but it could complicate tax withholding or overtime eligibility for borderline cases.
• On International Relations: Minimal direct impact, though it may influence U.S. companies operating abroad by aligning domestic policy with global trends toward portable benefits in digital economies.

Main Stakeholders Affected

• Workers: Especially gig economy participants (e.g., rideshare drivers, freelancers) who could receive benefits like insurance or training without being reclassified as employees, gaining more protections while retaining independence.
• Employers and Businesses: Companies in tech, delivery, or consulting sectors that rely on contractors; they benefit from clearer rules to provide perks without legal risks like back pay for overtime or benefits mandates.
• Unions and Advocacy Groups: Labor organizations may oppose it if it weakens pathways to full employee status and associated rights (e.g., minimum wage, unionization).
• Federal Agencies: DOL, IRS, and others involved in wage, hour, and tax enforcement, as they adapt to the narrowed classification criteria.

Notable Legal, Constitutional, or Political Implications

• Legal Implications: This alters the "economic realities" test used in employee classification lawsuits, potentially reducing litigation over benefits but inviting challenges if seen as undermining worker protections. It applies uniformly to federal laws, preempting state variations and requiring courts to ignore benefits in disputes.
• Constitutional Implications: No direct challenges anticipated, as it regulates commerce (a congressional power under the Commerce Clause), but it could face scrutiny if perceived as favoring businesses over workers' due process rights in classification appeals.
• Political Implications: The bill reflects bipartisan support for modernizing labor laws amid rising gig work (introduced by Rep. Kiley with co-sponsors from both parties). It could spark debate on balancing worker security with business flexibility, influencing future reforms like portable benefits systems or independent contractor protections.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Kiley, Kevin [R-CA-3]

Cosponsors (9)

Rep. Messmer, Mark [R-IN-8], Rep. Kean, Thomas H. [R-NJ-7], Rep. Carter, Earl L. "Buddy" [R-GA-1], Rep. Owens, Burgess [R-UT-4], Rep. Onder, Robert F. [R-MO-3], Rep. Grothman, Glenn [R-WI-6], Rep. Baumgartner, Michael [R-WA-5], Rep. Stefanik, Elise M. [R-NY-21], Rep. Miller, Mary E. [R-IL-15]

Recent Actions

• 2026-02-20: Placed on the Union Calendar, Calendar No. 432.
• 2026-02-20: Reported (Amended) by the Committee on Education and Workforce. H. Rept. 119-506.
• 2026-02-20: Reported (Amended) by the Committee on Education and Workforce. H. Rept. 119-506.
• 2025-07-23: Ordered to be Reported in the Nature of a Substitute by the Yeas and Nays: 19 - 16.
• 2025-07-23: Committee Consideration and Mark-up Session Held
• 2025-02-13: Referred to the House Committee on Education and Workforce.
• 2025-02-13: Introduced in House
• 2025-02-13: Introduced in House

Bill Versions

• To ensure that the provision of portable benefits to an individual is not considered in determining whether such individual is an employee of a person. — issued 2025-02-13 — PDF (2 pages)
• Modern Worker Security Act — issued 2026-02-20 — PDF (6 pages)