1. Short title This Act may be cited as the Payroll Fraud Prevention Act of 2017 . 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) has been engaged, in the course of the trade or business of the person, 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 trade or business of the person, 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 interest in the entity; (II) creation or maintenance of such entity is a condition for the provision of such labor or services to the person; and (III) the person would be required to file an information return for the entity under section 6041A(a) of the Internal Revenue Code of 1986 if the entity were an individual. . (b) Classification as employees Section 11(c) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 211(c) ) is amended— (1) by striking (c) Every employer subject to any provision of this Act or of any order issued under this Act and inserting the following: (c) Recordkeeping; classification; notice (1) Recordkeeping Every person subject to any provision of this Act or of any order issued under this Act