The Gig Is Up Act would change federal tax treatment for certain large businesses that rely heavily on independent contractors. It applies to a person or business with at least $100 million in annual gross receipts and at least 10,000 individuals contracting to provide services during the year. For those covered businesses, payments to those contractors would be treated like wages for payroll tax purposes, rather than as ordinary contractor payments.
The bill also increases the employer-side payroll tax rates applied to those payments by doubling the rates under section 3111 of the Internal Revenue Code. In addition, it amends the Social Security Act so that amounts treated as wages under the new rule are counted for Social Security earnings purposes, with an adjustment tied to the employer payroll tax amount. The changes would apply to remuneration and other payments made after December 31, 2026.
If enacted, the bill would amend the Internal Revenue Code and the Social Security Act to create a special payroll tax withholding regime for very large companies that use large numbers of independent contractors. It would effectively narrow the tax advantage of contractor classification for covered firms by treating contractor payments as wages for payroll tax purposes and by imposing a higher payroll tax rate on those payments. The bill would affect large platform-based or gig-economy businesses, their contractors, and federal payroll tax administration, while leaving smaller businesses outside the threshold unaffected.
Based on the bill’s sponsorship and the absence of recorded committee debate or votes, the available context suggests the measure is being advanced as a pro-worker tax and classification reform aimed at large gig-economy employers. The title and structure indicate support from sponsors concerned about contractor misclassification and payroll tax fairness. Because there are no transcripts or vote records provided, there is no documented opposition or bipartisan sentiment in the available materials.
The main point of contention is likely the bill’s treatment of independent contractors as wage-equivalent for payroll tax purposes, especially for large businesses that rely on flexible labor models. Supporters would view the measure as closing tax loopholes and ensuring Social Security and payroll tax contributions, while critics may argue it increases labor costs, reduces flexibility, and blurs the distinction between employees and contractors. Another likely issue is the bill’s narrow but high-impact threshold—targeting only businesses with $100 million in receipts and 10,000 contractors—which could be seen as either appropriately focused or as an arbitrary line that captures major gig platforms while exempting other firms.