Employee Status

National Railroad Passenger Corporation (Amtrak)

1. Station Custodial Services

2. Litigation Support Personnel

3. Loss Prevention Consultants

This is the decision of the Railroad Retirement Board regarding

whether the above-listed services performed for National Railroad 

Passenger Corporation (Amtrak) constitute employee service under

the Railroad Retirement and Railroad Unemployment Insurance Acts.

Amtrak is a covered employer under those Acts.

Amtrak issues purchase orders for station custodial services to be

performed at unstaffed stations. The purchase orders generally 

provide for payment on a monthly basis for a period of one year.

The services performed include opening the station before the first

train of the day arrives, closing it after the last train leaves,

and cleaning and repairing and generally maintaining the station.

Amtrak does not require time and attendance reports and there is no

supervision of the individuals involved. Those individuals are

treated as independent contractors for the purposes of payment of

income and employment taxes.

Since 1984 Amtrak has contracted for individuals to perform 

litigation support such as:

* * * maintaining and updating Amtrak's law library;

maintaining, updating, and retrieving files from Amtrak's 

law department central files; collecting, reviewing, and

analyzing documents relevant to litigation; coding 

documents into a litigation support data base;

supervising document coders and document handlers; and,

organizing and preparing documents for microfilming; 

retrieving documents and microfilming.

The work is performed on Amtrak property and for Amtrak only, and

is supervised by Amtrak. For the period 1984 through 1991 the

payment for services was made through purchase orders issued to the

individuals. A total of 225 individuals have provided these

services for varying periods since 1984. In 1987 the Internal

Revenue Service held these individuals to be employees of Amtrak.

In 1991 Amtrak contracted with Ameritemps for provision of these

services from two individuals who were previously performing 

services directly for Amtrak. These two individuals are now

performing these services directly for Amtrak which is reporting 

them as employees.

Loss prevention consultants provide investigative services for

Amtrak

Through observations, particularly on board company 

trains, consultants investigate areas where evidence of

BCD 1995-100.1 BA # 8301
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National Railroad Passenger Corporation (Amtrak)

lost revenue has been uncovered during routine audits,

received in the form of a tip, or uncovered during 

routine observation. Assignments include, for example,

riding a train in a particular corridor for a one-week 

period to audit conductor cash sales activities, evaluate

employee service and performance, and observe station

conditions. A common term used for people performing 

this kind of work is "spotters". A spotter may also be

requested to perform office work, testify at disciplinary 

hearings, and perform related audit functions.

Amtrak contracts for these services on a six month basis. There

were 37 individuals performing these services for the 1991-1992

period. Work is assigned to the individuals on an as needed basis

and the hours vary depending on Amtrak's needs and the availability 

of the worker. They are free to offer their services to others.

They are not expected to adhere to an established routine. Amtrak 

furnishes them with checklists to assist in investigations which 

state that "the material furnished by Amtrak [is] not ' all

inclusive.' Loss prevention consultants are expected to use

creativity, initiative, and observation skills to provide useful

feedback to Amtrak regarding its workforce and operations." The

individuals may decline assignments. Amtrak does not guarantee a

minimum amount of compensation or hours. Because the individuals

generally must work undercover, they usually do not work for Amtrak 

for long periods of time.

Section 1(b) of the Railroad Retirement Act and section 1(d)(1) of

the Railroad Unemployment Insurance Act both define a covered 

employee as an individual in the service of an employer for

compensation. Section 1(d) of the Railroad Retirement Act further

defines an individual as "in the service of an employer" when:

(i)(A) he is subject to the continuing authority of

the employer to supervise and direct the manner of

rendition of his service, or (B) he is rendering 

professional or technical services and is integrated into

the staff of the employer, or (C) he is rendering, on the

property used in the employer's operations, personal

services the rendition of which is integrated into the

employer's operations; and

(ii) he renders such service for compensation * * * .

Section 1(e) of the Railroad Unemployment Insurance Act contains a

definition of service substantially identical to the above, as do

sections 3231(b) and 3231(d) of the Railroad Retirement Tax Act (26

U.S.C. §§ 3231(b) and (d) ) . While the regulations of the RRB
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National Railroad Passenger Corporation (Amtrak)

generally merely restate this provision, it should be noted that

section 203.3(b) thereof (20 CFR 203.3(b)) provides that the

foregoing criteria apply irrespective of whether "the service is

performed on a part-time basis * * *." Paragraph (A) of the

definition dates from the inception of the railroad retirement 

system. See Public Law No. 162, 75th Cong., Ch. 382, Part I, (50

Stat. 307) .

The individuals performing the station custodial services are

obligated to maintain those stations and to open and close them,

but are not subject to the authority of Amtrak to supervise and

direct the manner of performance. Accordingly, those individuals 

are not covered by paragraph (A), above. Since the services 

provided are not professional or technical as those terms are used 

in paragraph (B), those individuals are not covered by paragraph

(B) . Since the services rendered are not personal services in that

the individuals under contract to Amtrak may and do substitute 

performance of those services by others, those services are not

covered by paragraph (C). Accordingly, service by the individuals 

performing the station custodial services for Amtrak are not

covered under the Railroad Retirement and Railroad Unemployment 

Insurance Acts.

The services performed by the litigation support personnel are

performed subject to the continuing authority of Amtrak to

supervise and direct the manner of performance, and those

individuals are therefore employees of Amtrak. They were so held 

by the Internal Revenue Service, and it does not appear that Amtrak

disputes this conclusion, although Amtrak does request relief from

taxes based upon the contention that its treatment of the

individuals as independent contractors was reasonable pursuant to

section 53 0 of the Internal Revenue Code, which is not at issue

here. That at least two of those individuals were treated by

Amtrak as employees of Ameritemps as of September 1991 would not

affect the creditability of the service in question. It is not

contended that the supervision or work of those employees was

altered at all by the arrangement with Ameritemps. Accordingly,

service performed by litigation support personnel for Amtrak is

covered under the Railroad Retirement and Railroad Unemployment 

Insurance Acts regardless of prior treatment of that service by

Amtrak as being performed by independent contractors or by 

employees of a temporary employment agency.

The individuals performing investigative services for Amtrak as

loss prevention consultants are not subject to the authority of

Amtrak to supervise and direct the manner of performance.

Accordingly, those individuals are not covered by paragraph (A).

It is also the decision of the Board that those individuals are not
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National Railroad Passenger Corporation (Amtrak)

covered under paragraph (B) in that, while it is questionable 

whether the services are professional or technical, in any case

they are not "integrated into the staff of the employer;" they

appear to have virtually no relationship with the staff of Amtrak 

and by the nature of their work must be kept separate from that

staff. While it does appear that they are rendering "personal

services" as that term is used in paragraph (C), the rendition of

those services is not integrated into Amtrak's operations under (C)

in that those services are not integral, central, or essential to

Amtrak's enterprise.

Glen L. Bower

J^erotrome F. Kever