To amend the Fair Labor Standards Act of 1938 to ensure that employees are not misclassified as non-employees, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Payroll Fraud Prevention Act''.
SEC. 2. CLASSIFICATION OF EMPLOYEES AND NON-EMPLOYEES.
(a) Definitions.--Section 3 of the Fair Labor Standards Act of 1938 (29 U.S.C. 203) is amended by adding at the end the following: ``(z) `Non-employee' means an individual who-- ``(1) a person has engaged, in the course of the person's trade or business, for the performance of labor or services; and ``(2) is not an employee of the person. ``(aa) `Covered individual' when used with respect to an employer or other person means-- ``(1) an employee of the employer; or ``(2) a non-employee of the person (including a person who is an employer)-- ``(A) whom the person has engaged, in the course of the person's trade or business, for the performance of labor or services; and ``(B)(i) with respect to whom the person is required to file an information return under section 6041A(a) of the Internal Revenue Code of 1986; or ``(ii) who is providing labor or services to the person through an entity that is a trust, estate, partnership, association, company, or corporation (as such terms are used in section 7701(a)(1) of the Internal Revenue Code of 1986) if-- ``(I) such individual has an ownership...