COST ESTIMATE OF H.R. 1320, MODERN WORKER SECURITY ACT

On 2026-09-16, Representative Tim Walberg (R-MI-5) delivered a floor speech titled "COST ESTIMATE OF H.R. 1320, MODERN WORKER SECURITY ACT" in the House.

COST ESTIMATE OF H.R. 1320, MODERN WORKER SECURITY ACT

Congressional Record, Volume 172 Issue 146 (Wednesday, September 16, 2026) [Congressional Record Volume 172, Number 146 (Wednesday, September 16, 2026)] [Extensions of Remarks] [Page E945] From the Congressional Record Online through the Government Publishing Office [ www.gpo.gov ] COST ESTIMATE OF H.R. 1320, MODERN WORKER SECURITY ACT ______ HON. TIM WALBERG of michigan in the house of representatives Wednesday, September 16, 2026 Mr. WALBERG. Mr. Speaker, I include in the Record the following cost estimate for H.R. 1320, Modern Worker Security Act, prepared by the Congressional Budget Office, which was not made available to the Committee on Education and Workforce at the time of the filing of the legislative report. H.R. 1320, MODERN WORKER SECURITY ACT, AS REPORTED BY THE HOUSE COMMITTEE ON EDUCATION AND WORKFORCE ON FEBRUARY 20, 2026 ------------------------------------------------------------------------ By fiscal year, millions of dollars-- ----------------------------------- 2026 2026-2031 2026-2036 ------------------------------------------------------------------------ Direct Spending (Outlays)........... * * * Revenues............................ * * * Increase or Decrease (-) in the * * * Deficit............................ Spending Subject to Appropriation * * ** (Outlays).......................... ------------------------------------------------------------------------ * = between -$500,000 and $500,000. ** = not estimated. Increases net direct spending in any of the four consecutive 10-year periods beginning in 2037? No. Increases on-budget deficits in any of the four consecutive 10-year periods beginning in 2037? * Statutory pay-as-you-go procedures apply? Yes. Mandate Effects: Contains intergovernmental mandate? No. Contains private-sector mandate? No. H.R. 1320 would prohibit considering whether a person receives portable benefits to determine if they are an employee for the purposes of any federal law. Portable benefits include those commonly provided to full-time employees, such as workers' compensation, professional development, paid leave, health insurance coverage, and retirement savings. Some of those benefits receive preferential tax treatment. Whether a worker is classified as an employee depends on many other factors, and the provision of tax-preferred benefits, such as health insurance, is subject to other laws and rules not modified by H.R. 1320. CBO expects that, if the bill were enacted, some employers would offer nonemployees the option of participating in group health benefits. As a result, some nonemployees would participate in employer-subsidized group coverage rather than purchasing individual coverage. CBO and the staff of the Joint Committee on Taxation estimate that such a shift in coverage would reduce federal tax revenues by less than $500,000 over the 2026-2036 period. Enacting H.R. 1320 also would decrease collections of civil monetary penalties that the Department of Labor (DOL) is authorized to impose on employers that violate the Fair Labor Standards Act (FLSA). Those penalties are recorded in the federal budget as revenues, and a portion may be spent without further appropriation. Under current law, DOL typically collects less than $20 million each year in such penalties for FLSA violations, according to agency enforcement statistics. Because worker classification depends on several factors, and H.R. 1320 would only restrict one of those factors, CBO estimates that enacting the bill would change the determination of employee status for a small number of cases and reduce collections of civil monetary penalties by less than $500,000. That reduction would decrease revenues and direct spending and result in a net increase in the deficit of less than $500,000 over the 2026-2036 period. CBO estimates that implementing H.R. 1320 would not significantly affect the operating costs of DOL or the National Labor Relations Board over the 2026-2031 period; any change in related spending would be subject to the availability of appropriated funds. The CBO staff contact for this estimate is Maggie Applebaum Rufe. The estimate was reviewed by Christina Hawley Anthony, Deputy Director of Budget Analysis. Phillip L. Swagel, Director, Congressional Budget Office. ____________________

Referenced legislation: HR1320, HR1320