Large gig economy firms would withhold taxes on contractor pay under HR 9114

What does this do?

HR 9114 requires large companies earning at least $100 million per year and using at least 10,000 independent contractors to withhold payroll taxes from contractor payments, the same way they do for regular employees. It also doubles the employer share of Social Security and Medicare taxes those companies must pay for each contractor.

Who does it affect?

The bill targets large gig economy platforms such as rideshare, delivery, and freelance marketplace companies that rely heavily on independent contractors. Independent contractors working for those companies would have taxes withheld automatically from their payments rather than paying estimated taxes on their own.

Why does it matter?

Supporters say the bill closes a gap where large companies using gig workers pay less in taxes than companies with traditional employees and helps workers build Social Security benefits. Critics argue it raises costs for companies and could reduce opportunities or earnings for gig workers.

What does it cost, and who pays?

Qualifying companies would face higher tax costs because the employer share of Social Security and Medicare taxes would be doubled for each contractor. Companies would also take on new payroll withholding and paperwork requirements they do not currently have for contractors.

Where does it stand?