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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2504 Introduced in Senate (IS)]

103d CONGRESS
  2d Session
                                S. 2504

  To extend the protections of Federal labor and civil rights laws to 
 part-time, temporary, and leased employees, independent contractors, 
and other contingent workers, and to ensure equitable treatment of such 
                                workers.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

            October 5 (legislative day, September 12), 1994

  Mr. Metzenbaum (for himself and Mr. Simon) introduced the following 
 bill; which was read twice and referred to the Committee on Labor and 
                            Human Resources

_______________________________________________________________________

                                 A BILL

 
  To extend the protections of Federal labor and civil rights laws to 
 part-time, temporary, and leased employees, independent contractors, 
and other contingent workers, and to ensure equitable treatment of such 
                                workers.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Contingent Workforce Equity Act''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds that--
            (1) the number of part-time, temporary, leased, and other 
        contingent workers is increasing in numbers and as a percentage 
        of the workforce as a whole;
            (2) Federal personnel practices have contributed to the 
        increasing use of contingent workers;
            (3) on average, contingent workers earn substantially less 
        than full-time workers and are less likely to receive employer-
        provided health, pension, or other basic benefits;
            (4) many contingent workers are excluded from coverage 
        under State unemployment insurance laws;
            (5) many contingent workers are excluded from the basic 
        worker protections of Federal labor and civil rights laws;
            (6) many employers misclassify their employees as 
        independent contractors to avoid the requirements of social 
        security, unemployment insurance, workers' compensation, and 
        other laws; and
            (7) contingent workers are entitled to fair wages and 
        benefits, protections under Federal labor and civil rights 
        laws, and coverage under State unemployment insurance laws, 
        where feasible.
    (b) Purposes.--The purposes of this Act are to--
            (1) discourage employers from replacing full-time positions 
        with part-time, temporary, or other contingent positions as a 
        means of lowering labor costs or avoiding the requirements of 
        Federal or State employment or employment-related laws;
            (2) extend the protections of Federal labor and civil 
        rights laws to contingent workers; and
            (3) extend coverage under State unemployment insurance laws 
        to contingent workers, where feasible.

                      TITLE I--WORKER PROTECTIONS

SEC. 101. MINIMUM WAGE.

    Section 6(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 
206(a)(1)) is amended to read as follows:
            ``(1) except as otherwise provided in this section--
                    ``(A) not less than--
                            ``(i) $4.25 an hour during the period 
                        ending on December 31, 1994;
                            ``(ii) $4.85 an hour during the year 
                        beginning on January 1, 1995;
                            ``(iii) $5.55 an hour during the year 
                        beginning January 1, 1996;
                            ``(iv) $6.20 an hour during the year 
                        beginning January 1, 1997; and
                            ``(v) $6.75 an hour during the year 
                        beginning January 1, 1998; and
                    ``(B) with respect to the year beginning on January 
                1, 1999, and each such succeeding year, not less than 
                the amount applicable under clause (v) of subparagraph 
                adjusted on October 1 of the previous year to equal 50 
                percent of the monthly average hourly earnings for 
                nonfarm, nonsupervisory private workers for the 
                preceding 12 months, as determined by the Bureau of 
                Labor Statistics, rounded to the nearest multiple of 
                $0.05, except that any amount determined under this 
                subparagraph shall not be less than the amount 
                applicable under this paragraph for the preceding 
                year;''.

SEC. 102. EQUAL PAY.

    Section 6 of the Fair Labor Standards Act (29 U.S.C. 206) is 
amended by adding at the end thereof the following:
    ``(g)(1) No employer having employees subject to any provisions of 
this section shall discriminate, within any establishment in which such 
employees are employed, between employees on the basis of employment 
status by paying wages to part-time or temporary employees in such 
establishment at a rate less than the rate at which the employer pays 
wages to full-time employees in such establishment for equal work on 
jobs the performance of which requires equal skill, effort, and 
responsibility, and which are performed under similar working 
conditions, except where such payment is made pursuant to--
            ``(A) a seniority system;
            ``(B) a merit system;
            ``(C) a system that measures earnings by quantity or 
        quality of production; or
            ``(D) a differential based on any other factor other than 
        employment status.
An employer who is paying a wage rate differential in violation of this 
subsection shall not, in order to comply with the provisions of this 
subsection, reduce the wage rate of any employee.
    ``(2) No labor organization, or its agents, representing employees 
of an employer having employees subject to any provisions of this 
section shall cause or attempt to cause such an employer to 
discriminate against an employee in violation of paragraph (1).
    ``(3) For purposes of administration and enforcement, any amounts 
owing to any employee that have been withheld in violation of this 
subsection shall be deemed to be unpaid minimum wages or unpaid 
overtime compensation under this Act.
    ``(4) As used in this subsection, the term `labor organization' 
means any organization of any kind, or any agency or employee 
representation committee or plan, in which employees participate and 
which exists for the purpose, in whole or in part, of dealing with 
employers concerning grievances, labor disputes, wages, rates of pay, 
hours of employment, or conditions of work.''.

SEC. 103. CIVIL RIGHTS.

    Section 1977(a) of the Revised Statutes (42 U.S.C. 1981(a)) is 
amended to read as follows:
    ``(a)(1) All persons within the jurisdiction of the United States 
shall have the right in every State and Territory--
            ``(A) to make and enforce contracts free from unlawful 
        discrimination based on race, color, religion, sex, national 
        origin, age, or disability; and
            ``(B) to sue, be parties, give evidence, and to be subject 
        to punishment, pains, penalties, taxes, licenses, and 
        exactions, free from such unlawful discrimination.
    ``(2) For purposes of determining the existence of unlawful 
discrimination under paragraph (1)--
            ``(A) in the case of a claim of unlawful discrimination 
        based on race, color, religion, sex, or national origin, the 
        same legal standards shall apply as are applicable under title 
        VII of the Civil Rights Act of 1964 (42 U.S.C. 20000e et seq.);
            ``(B) in the case of a claim of unlawful discrimination 
        based on age, the same legal standards shall apply as are 
        applicable under the Age Discrimination in Employment Act of 
        1967 (29 U.S.C. 621 et seq.); and
            ``(C) in the case of a claim of unlawful discrimination 
        based on disability, the same legal standards shall apply as 
        are applicable under the Americans with Disabilities Act (42 
        U.S.C. 12101 et seq.).''.

SEC. 104. COLLECTIVE BARGAINING RIGHTS.

    (a) Determination of Bargaining Units.--Section 9(b) of the 
National Labor Relations Act (29 U.S.C. 159(b)) is amended--
            (1) by striking ``; or (2)'' and inserting ``or''; and
            (2) by striking ``or (3)'' and inserting ``; (3) decide 
        that an employee shall be excluded from a unit otherwise 
        appropriate for the purposes of collective bargaining based on 
        the employee's part-time or temporary status, if such employee 
        (A) has a reasonable expectation of continued employment; and 
        (B) is employed by the employer on the date on which 
        eligibility for participation in a representation election is 
        determined and on the date of the election; or (4)''.
    (b) Joint Employer Status.--Section 2(3) of the National Labor 
Relations Act (29 U.S.C. 152(3)) is amended by adding at the end 
thereof the following: ``An individual employed by a contractor of an 
employer shall be considered an employee of the employer if the 
individual is assigned on a regular basis to perform work on the 
premises of the employer, and the tasks performed by such individual 
are functionally integrated with the operations of the employer.''.

SEC. 105. OCCUPATIONAL SAFETY AND HEALTH.

    Section 5(a)(1) of the Occupational Safety and Health Act (29 
U.S.C. 654(a)(1)) is amended to read as follows:
            ``(1) shall furnish employment and a place of employment 
        that are free from recognized hazards that are causing or are 
        likely to cause death or serious physical harm to the employees 
        of the employer or to individuals who are employed by another 
        employer and are performing services at such place of 
        employment;''.

SEC. 106. ADVANCE NOTICE OF LAYOFFS AND PLANT CLOSINGS.

    Section 2 of the Worker Adjustment and Retraining Notification Act 
(29 U.S.C. 2101 et seq.) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), to read as follows:
            ``(1) the term `employer' means any business enterprise 
        that employs 100 or more employees;'';
                    (B) in paragraph (2), by striking ``excluding any 
                part-time employees'';
                    (C) in paragraph (3), by striking ``(excluding any 
                part-time employees)'' each place such term appears; 
                and
                    (D) by striking paragraph (8); and
            (2) in subsection (b)(1), by striking ``(other than a part-
        time employee)''.

SEC. 107. CONTINGENT WORKFORCE SURVEY.

    The Secretary of Labor, acting through the Commissioner of the 
Bureau of Labor Statistics, shall establish and carry out an annual 
survey identifying--
            (1) the characteristics of temporary workers in the United 
        States;
            (2) the relationship between such workers and the 
        establishments at which such workers are temporarily employed; 
        and
            (3) where appropriate, the relationship between such 
        workers and their permanent employers.

SEC. 108. FEDERAL SERVICE CONTRACT SUCCESSORSHIP.

    Section 4(c) of the Service Contract Act of 1965 (41 U.S.C. 353(c)) 
is amended--
            (1) by striking ``(c) No'' and inserting ``(c)(1) No''; and
            (2) by adding at the end the following new paragraphs:
    ``(2)(A) Except as provided in subparagraph (B), a contractor under 
a successor contract (under which substantially the same services are 
performed) shall, in good faith, provide a right of first refusal of 
employment under that contract to each employee employed under the 
predecessor contract. If, under the successor contract, the number of 
employees to be employed is less than the number of employees employed 
under the predecessor contract, the contractor shall provide such right 
to the employees on the basis of seniority.
    ``(B) Notwithstanding the requirements of subparagraph (A), a 
contractor shall not be required to provide a right of first refusal of 
employment to an employee employed under the predecessor contract if--
            ``(i) the contractor reasonably believes, based on the past 
        performance of the employee under the predecessor contract, 
        that the employee is unable to perform the work suitably under 
        the successor contract; or
            ``(ii) if such action would require the contractor to lay 
        off or discharge an employee who has worked continuously for 
        the contractor for not less than the 60-day period immediately 
        preceding the commencement of the successor contract.
    ``(C) A contractor satisfies the requirement under subparagraph (A) 
to provide employees under the predecessor contract with a right of 
first refusal of employment under a successor contract on the basis of 
seniority if the contractor provides such right first to the most 
senior employees and then to the other employees on the basis of 
descending order of seniority until all of the positions of employment 
are filled or all employees under the predecessor contract have 
exercised the right, whichever occurs first. Seniority shall be 
determined on the basis of length of service under the predecessor 
contract and each contract, if any, that preceded the predecessor 
contract.
    ``(D) In subparagraph (A), the term `contractor', with respect to a 
successor contract, includes a subcontractor performing the obligations 
of the contractor under such contract.
    ``(3) The Secretary shall issue an order against any contractor or 
subcontractor under a successor contract who fails to hire an 
individual in accordance with this subsection. The order shall require 
the contractor or subcontractor to hire any individual whom the 
contractor or subcontractor has unlawfully failed to hire and to 
compensate the individual for any wages and fringe benefits that the 
individual would have received if the individual would have been hired 
by the contractor or subcontractor. Any amount that the Secretary 
determines is owed to an individual by a contractor or subcontractor 
under this paragraph may be withheld from any accrued payment due on 
the successor contract or any other contact between the contractor and 
the Federal Government.
    ``(5)(A) This subsection shall not apply to contracts awarded 
pursuant to the Javits-Wagner-O'Day Act, or under which services are 
provided to the Federal Government on an intermittent basis.
    ``(B) In subparagraph (A), the term `Javits-Wagner-O'Day Act' means 
the Act entitled `An Act to create a Committee on Purchases of Blind-
made Products, and for other purposes', approved June 25, 1938 (41 
U.S.C. 46-48c), commonly referred to as the Wagner-O'Day Act, that was 
revised and reenacted in the Act of June 23, 1971 (85 Stat. 77), 
commonly referred to as the Javits-Wagner-O'Day Act.''.

                      TITLE II--EMPLOYEE BENEFITS

SEC. 201. FAMILY AND MEDICAL LEAVE.

    Section 101(2)(A) of the Family and Medical Leave Act (29 U.S.C. 
2611(2)(A)) is amended--
            (1) by striking ``at least 12 months'' and inserting ``at 
        least 3 months''; and
            (2) by striking ``at least 1,250 hours of service with such 
        employer during the previous 12-month period'' and inserting 
        ``at least 125 hours of service with such employer during the 
        previous 3-month period''.

SEC. 202. RETIREMENT AND HEALTH CARE BENEFITS.

    (a) Treatment of Employees Working at Less Than Full-Time Under 
Participation, Vesting, and Accrual Rules Governing Pension Plans.--
            (1) Participation rules.--
                    (A) In general.--Section 202(a)(3) of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1052(a)(3)) is amended by adding at the end the 
                following new subparagraph:
    ``(E)(i) For purposes of this paragraph, in the case of any 
employee who, as of the beginning of the 12-month period referred to in 
subparagraph (A)--
            ``(I) has customarily completed 500 or more hours of 
        service per year but less than 1,000 hours of service per year, 
        or
            ``(II) is employed in a type of position in which 
        employment customarily constitutes 500 or more hours of service 
        per year but less than 1,000 hours of service per year,
completion of 500 hours of service within such 12-month period shall be 
treated as completion of 1,000 hours of service.
    ``(ii) For purposes of this subparagraph, the extent to which 
employment in any type of position customarily constitutes less than 
1,000 hours of service per year shall be determined with respect to 
each pension plan in accordance with such regulations as the Secretary 
shall prescribe providing for consideration of facts and circumstances 
peculiar to the workforce constituting the participants in such 
plan.''.
                    (B) Conforming amendment.--Section 204(b)(1)(E) of 
                such Act (29 U.S.C. 1054(b)(1)(E)) is amended by 
                striking ``section 202(a)(3)(A)'' and inserting 
                ``subparagraphs (A) and (E) of section 202(a)(3)''.
            (2) Vesting rules.--
                    (A) In general.--Section 203(b)(2) of such Act (29 
                U.S.C. 1053(b)(2)) is amended by adding at the end the 
                following new subparagraph:
    ``(E)(i) For purposes of this paragraph, in the case of any 
employee who, as of the beginning of the period designated by the plan 
pursuant to subparagraph (A)--
            ``(I) has customarily completed 500 or more hours of 
        service per year but less than 1,000 hours of service per year, 
        or
            ``(II) is employed in a type of position in which 
        employment customarily constitutes 500 or more hours of service 
        per year but less than 1,000 hours of service per year,
completion of 500 hours of service within such period shall be treated 
as completion of 1,000 hours of service.
    ``(ii) For purposes of this subparagraph, the extent to which 
employment in any type of position customarily constitutes less than 
1,000 hours of service per year shall be determined with respect to 
each pension plan in accordance with such regulations as the Secretary 
shall prescribe providing for consideration of facts and circumstances 
peculiar to the workforce constituting the participants in such 
plan.''.
                    (B) 1-year breaks in service.--Section 203(b)(3) of 
                such Act (29 U.S.C. 1053(b)(3)) is amended by adding at 
                the end the following new subparagraph:
    ``(F)(i) For purposes of this paragraph, in the case of any 
employee who, as of the beginning of the period designated by the plan 
pursuant to subparagraph (A)--
            ``(I) has customarily completed 500 or more hours of 
        service per year but less than 1,000 hours of service per year, 
        or
            ``(II) is employed in a type of position in which 
        employment customarily constitutes 500 or more hours of service 
        per year but less than 1,000 hours of service per year,
completion of 250 hours of service within such period shall be treated 
as completion of 500 hours of service.
    ``(ii) For purposes of this subparagraph, the extent to which 
employment in any type of position customarily constitutes less than 
1,000 hours of service per year shall be determined with respect to 
each pension plan in accordance with such regulations as the Secretary 
shall prescribe providing for consideration of facts and circumstances 
peculiar to the workforce constituting the participants in such 
plan.''.
            (3) Accrual rules.--Section 204(b)(4)(C) of such Act (29 
        U.S.C. 1054(b)(4)(C)) is amended--
                    (A) by inserting ``(i)'' after ``(C)''; and
                    (B) by adding at the end the following new clauses:
    ``(ii) For purposes of this subparagraph, in the case of any 
employee who, as of the beginning of the period designated by the plan 
pursuant to clause (i)--
            ``(I) has customarily completed 500 or more hours of 
        service per year but less than 1,000 hours of service per year, 
        or
            ``(II) is employed in a type of position in which 
        employment customarily constitutes 500 or more hours of service 
        per year but less than 1,000 hours of service per year,
completion of 500 hours of service within such period shall be treated 
as completion of 1,000 hours of service.
    ``(iii) For purposes of clause (ii), the extent to which employment 
in any type of position customarily constitutes less than 1,000 hours 
of service per year shall be determined with respect to each pension 
plan in accordance with such regulations as the Secretary shall 
prescribe providing for consideration of facts and circumstances 
peculiar to the workforce constituting the participants in such 
plan.''.
    (b) Treatment of Employees Working at Less Than Full-Time Under 
Group Health Plans.
            (1) In general.--Part 2 of subtitle B of title I of such 
        Act is amended--
                    (A) by redesignating section 211 (29 U.S.C. 1061) 
                as section 212; and
                    (B) by inserting after section 210 (29 U.S.C. 1060) 
                the following new section:

       ``treatment of part-time workers under group health plans

    ``Sec. 211. (a) In General.--A reduction in the employer-provided 
premium under a group health plan with respect to any employee for any 
period of coverage solely because the employee's customary employment 
is less than full-time may be provided under such plan only if the 
employee is described in subsection (b) and only to the extent 
permitted under subsection (c).
    ``(b) Reductions Applicable to Employees Working Less Than Full-
Time.--
            ``(1) In general.--An employee is described in this 
        subsection if such employee, as of the beginning of the period 
        of coverage referred to in subsection (a)--
                    ``(A) has customarily completed less than 30 hours 
                of service per week, or
                    ``(B) is employed in a type of position in which 
                employment customarily constitutes less than 30 hours 
                of service per week.
            ``(2) Regulations.--For purposes of paragraph (1), whether 
        employment in any type of position customarily constitutes less 
        than 30 hours of service per week shall be determined with 
        respect to each group health plan in accordance with such 
        regulations as the Secretary shall prescribe providing for 
        consideration of facts and circumstances peculiar to the 
        workforce constituting the participants in such plan.
    ``(c) Amount of Permissible Reduction.--The employer-provided 
premium under a group health plan with respect to any employee for any 
period of coverage, after the reduction permitted under subsection (a), 
shall not be less than a ratable portion of the employer-provided 
premium which would be provided under such plan for such period of 
coverage with respect to an employee who completes 30 hours of service 
per week.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Group health plan.--The term `group health plan' has 
        the meaning provided such term in section 607(1).
            ``(2) Employer-provided premium.--
                    ``(A) In general.--The term `employer-provided 
                premium' under a plan for any period of coverage means 
                the portion of the applicable premium under the plan 
                for such period of coverage which is attributable under 
                the plan to employer contributions.
                    ``(B) Applicable premium.--For purposes of 
                subparagraph (A), in determining the applicable premium 
                of a group health plan, principles similar to the 
                principles applicable under section 604 shall apply.''.
            (2) Conforming amendments.--
                    (A) Section 201(1) of such Act (29 U.S.C. 1051(1)) 
                is amended by inserting ``, except with respect to 
                section 211'' before the semicolon.
                    (B) The table of contents in section 1 of such Act 
                is amended by striking the item relating to section 211 
                and inserting the following new items:

``Sec. 211. Treatment of part-time workers under group health plans.
``Sec. 212. Effective date.''.
    (c) Expansion of Definition of Employee To Include Certain 
Individuals Whose Services Are Leased or Contracted for.--Paragraph (6) 
of section 3 of such Act (29 U.S.C. 1002(6)) is amended--
            (1) by inserting ``(A)'' after ``(6)''; and
            (2) by adding at the end the following new subparagraph:
    ``(B) Such term includes, with respect to any employer, any person 
who is not an employee (within the meaning of subparagraph (A)) of such 
employer and who provides services to such employer, if--
            ``(i) such person has (pursuant to an agreement with such 
        employer or any other person) performed such services for such 
        employer (or for such employer and related persons (within the 
        meaning of section 144(a)(3) of the Internal Revenue Code of 
        1986)) for a period of at least 1 year (6 months in the case of 
        core health benefits) at the rate of at least 500 hours of 
        service per year, and
            ``(ii) such services are of a type historically performed, 
        in the business field of the employer, by employees (within the 
        meaning of subparagraph (A)).''.
    (d) Effective Dates.
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply with respect to 
        plan years beginning on or after January 1, 1995.
            (2) Special rule for collectively bargained plans.--In the 
        case of a plan maintained pursuant to 1 or more collective 
        bargaining agreements between employee representatives and 1 or 
        more employers ratified on or before the date of the enactment 
        of this Act, paragraph (1) shall be applied to benefits 
        pursuant to, and individuals covered by, any such agreement by 
        substituting for ``January 1, 1995'' the date of the 
        commencement of the first plan year beginning on or after the 
        earlier of--
                    (A) the later of--
                            (i) January 1, 1995, or
                            (ii) the date on which the last of such 
                        collective bargaining agreements terminates 
                        (determined without regard to any extension 
                        thereof after the date of the enactment of this 
                        Act), or
                    (B) January 1, 1997.
            (3) Plan amendments.--If any amendment made by this section 
        requires an amendment to any plan, such plan amendment shall 
        not be required to be made before the first plan year beginning 
        on or after January 1, 1996, if--
                    (A) during the period after such amendment made by 
                this section takes effect and before such first plan 
                year, the plan is operated in accordance with the 
                requirements of such amendment made by this section, 
                and
                    (B) such plan amendment applies retroactively to 
                the period after such amendment made by this section 
                takes effect and such first plan year.
        A plan shall not be treated as failing to provide definitely 
        determinable benefits or contributions, or to be operated in 
        accordance with the provisions of the plan, merely because it 
        operates in accordance with this paragraph.

SEC. 203. PENSION PORTABILITY.

    (a) Requirement of Portable Pension Accounts.--
            (1) In general.--Part 2 of subtitle B of title I of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 1051 
        et seq.) is amended by inserting after section 205 the 
        following new section:

``SEC. 205A. PORTABILITY REQUIREMENTS FOR DEFINED CONTRIBUTION PLANS.

    ``(a) Direct Transfers.--
            ``(1) In general.--Each defined contribution plan shall, at 
        the election of an employee upon separation from service, make 
        a direct trustee-to-trustee transfer of the portion of the 
        employee's eligible amount specified in the election to a 
        portable pension account specified in the election which--
                    ``(A) is maintained by a qualified pension plan 
                which agrees to accept the transfer, or
                    ``(B) is established by the individual on the 
                individual's own behalf.
            ``(2) Time for transfer.--The transfer under paragraph (1) 
        shall be made no later than 60 days after the date of the 
        employee's separation from service.
    ``(b) Portable Pension Accounts.--For purposes of this section--
            ``(1) In general.--The term `portable pension account' 
        means--
                    ``(A) in the case of a qualified pension plan, an 
                individual account plan, an individual account within 
                the plan, or simplified employee pension under section 
                408(k) of the Internal Revenue Code of 1986 meeting the 
                requirements of the following paragraphs of this 
                subsection, and
                    ``(B) in the case of an individual, an individual 
                retirement plan meeting such requirements.
            ``(2) Distribution requirements.--
                    ``(A) In general.--The requirements of this 
                paragraph are met if distributions from the account--
                            ``(i) may only be made in a permitted 
                        retirement income form, and
                            ``(ii) may only be made with the consent of 
                        the participant.
                    ``(B) Permitted retirement income form.--For 
                purposes of subparagraph (A), a permitted retirement 
                income form is as follows:
                            ``(i) A qualified joint and survivor 
                        annuity (within the meaning of section 205(d)).
                            ``(ii) Any other joint life annuity 
                        (including a cash refund annuity).
                            ``(iii) A single life annuity (including a 
                        cash refund annuity).
                            ``(iv) Any series of substantially equal 
                        periodic payments described in section 
                        72(t)(2)(A)(iv) of the Internal Revenue Code of 
                        1986 which are not part of an annuity described 
                        in the preceding clauses.
            ``(3) Spousal consent.--The requirements of this paragraph 
        shall not be met unless the account provides that any election 
        as to form of benefit must meet spousal consent requirements 
        which are identical to the requirements of section 205(c)(2).
    ``(c) Eligible Amount.--For purposes of this section, the term 
`eligible amount' means, with respect to any participant, the balance 
to the credit of the participant as of the date of the distribution, 
including interest on such balance through the date of the 
distribution.
    ``(d) Other Definitions and Rules.--For purposes of this section--
            ``(1) Qualified plan.--The term `qualified plan' means--
                    ``(A) a plan described in section 401(a) of the 
                Internal Revenue Code of 1986 which includes a trust 
                which is exempt from tax under section 501(a) of such 
                Code,
                    ``(B) an annuity plan described in section 403(a) 
                of such Code, and
                    ``(C) an annuity contract described in section 
                403(b) of such Code.
            ``(2) Individual retirement plan.--The term `individual 
        retirement plan' means--
                    ``(A) an individual retirement account described in 
                section 408(a) of such Code, and
                    ``(B) an individual retirement annuity described in 
                section 408(b) of such Code.
            ``(3) Beneficiaries or alternate payees.--In the case of an 
        individual who is a beneficiary of the participant or an 
        alternate payee (within the meaning of section 206(d)(3)(K)) 
        under a plan, such individual shall be treated in the same 
        manner as if a participant in the plan.''
            (2) Conforming amendments.--
                    (A) Section 204(g)(2) of the Employee Retirement 
                Income Security Act of 1974 (29 U.S.C. 1054(g)(2)) is 
                amended by adding at the end the following new 
                sentence: ``Except as otherwise provided in regulations 
                of the Secretary of Labor and the Secretary of the 
                Treasury, the requirements of subparagraph (B) shall 
                not be treated as violated in the case of a direct 
                trustee-to-trustee transfer described in section 
                205A.''
                    (B) Section 204(d) of the Employee Retirement 
                Income Security Act of 1974 (29 U.S.C. 1054(d)) is 
                amended--
                            (i) in paragraph (1), by striking ``or'',
                            (ii) in paragraph (2), by striking the 
                        period and inserting ``, or'', and
                            (iii) by inserting after paragraph (2) the 
                        following new paragraph:
            ``(3) a direct trustee-to-trustee transfer described in 
        section 205A.''
                    (C) The table of contents for part 2 of subtitle B 
                of title I of the Employee Retirement Income Security 
                Act of 1974 is amended by inserting after the item 
                relating to section 205 the following new item:

``Sec. 205A. Portability requirements for defined contribution plans.''
    (b) Reciprocity Agreements between Industry and Labor Funds.--
            (1) Establishment.--The Secretary of Labor shall establish 
        standards for plans maintained pursuant to collective 
        bargaining agreements between employers and employee 
        representatives which provide that 2 or more of the plans may 
        enter into agreements under which--
                    (A) the plans would maintain portable pension 
                accounts described in section 205A of the Employee 
                Retirement Income Security Act of 1974 (as added by 
                section 121) for employees who terminate employment 
                covered by 1 plan and begin employment covered by 
                another, or
                    (B) the plans would make arrangements for employees 
                to transfer accrued benefits and vesting rights from 
                one plan to another.
            (2) Standards made available.--The Secretary of Labor shall 
        make any standards developed under paragraph (1) available to 
        employers and employee representatives.
    (c) Inflation Adjustment for Deferred Vested Benefits.--
            (1) In general.--Section 203 of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1053) is amended by 
        adding at the end the following new subsection:
    ``(f) Deferred Nonforfeitable Benefits.--If an employee's 
participation in a plan is terminated before the date the employee is 
eligible for payment of an immediate annuity under the plan--
            ``(1) subsection (e) shall not apply, and
            ``(2) the plan shall provide that the employee may elect--
                    ``(A) to have the plan immediately distribute the 
                present value (using the interest rate specified by the 
                Secretary) of the employee's nonforfeitable benefit, or
                    ``(B) to have the plan provide inflation 
                adjustments (at the rates specified by the Secretary) 
                to such benefit during the period beginning with the 
                date of separation and ending with the date an annuity 
                is first payable.''
            (2) Accrued benefit.--Section 204(d) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1054(d)) is 
        amended by adding at the end the following new sentence: ``An 
        employee's accrued benefit under a plan shall be increased by 
        any inflation adjustment under section 203(f)(2)(B).''

SEC. 204. UNEMPLOYMENT COMPENSATION.

    (a) Part-Time Employees; Independent Contractors.--Subsection (a) 
of section 3304 of the Internal Revenue Code of 1986 (relating to 
requirements for approval of State unemployment compensation laws) is 
amended by striking ``and'' at the end of paragraph (17), by 
redesignating paragraph (18) as paragraph (20), and by inserting after 
paragraph (17) the following new paragraphs:
            ``(18) in applying the State law provisions relating to 
        availability for work, active search for work, or refusal to 
        accept work, to an individual seeking part-time employment, the 
        term `suitable work' shall not include any work where the 
        individual would normally perform services for more hours per 
        week than the number of hours per week for which the individual 
        is available, if the individual demonstrates good cause for the 
        individual's limited availability and such limitation does not 
        substantially impair the individual's current attachment to the 
        labor force;
            ``(19) the determination of whether an individual is an 
        employee of another person shall be made in accordance with 
        section 3306(i); and''.
    (b) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on November 
        1, 1995.
            (2) Special rule.--In the case of any State the legislature 
        of which has not been in session for at least 30 calendar days 
        (whether or not successive) between the date of the enactment 
        of this Act and November 1, 1995, the amendments made by this 
        section shall take effect 30 calendar days after the 1st day on 
        which such legislature is in session on or after November 1, 
        1995.

  TITLE III--MISCLASSIFICATION OF EMPLOYEES AS INDEPENDENT CONTRACTORS

SEC. 301. INTERNAL REVENUE SERVICE PROCEDURES.

    (a) Waiver of Employment Tax Liability for Reasonable Good Faith 
Misclassification Based on Common Law Rules.--Section 3509 of the 
Internal Revenue Code of 1986 (relating to determination of employer's 
liability for certain employment taxes) is amended by adding at the end 
the following new subsection:
    ``(e) Waiver of Employment Tax Liability for Reasonable Good Faith 
Misclassification Based on Common Law Rules.--
            ``(1) In general.--For purposes of determining the 
        liability of any taxpayer for employment taxes with respect to 
        any individual for any period, such individual shall be deemed 
        not to have been an employee of the taxpayer for such period 
        if--
                    ``(A) the taxpayer did not treat such individual as 
                an employee for purposes of the employment taxes for 
                such period,
                    ``(B) the taxpayer's treatment of such individual 
                as not being an employee was based on a reasonable good 
                faith misapplication of the common law rules used for 
                determining the employer-employee relationship,
                    ``(C) all Federal tax returns (including 
                information returns) required to be filed by the 
                taxpayer with respect to such individual for such 
                period were filed on a basis consistent with the 
                taxpayer's treatment of such individual as not being an 
                employee,
                    ``(D) the taxpayer (and any predecessor) did not 
                treat any other individual holding a substantially 
                similar position as an employee for purposes of the 
                employment taxes for any period beginning after 
                December 31, 1977, and
                    ``(E) the taxpayer enters into a closing agreement 
                under section 7121 with the Secretary (in the time and 
                manner determined by the Secretary) agreeing to treat 
                such individual, and any other individual holding a 
                substantially similar position, as employees and to 
                file all Federal employment tax returns with respect to 
                such individuals on a basis consistent with the 
                taxpayer's treatment of such individuals as employees.
            ``(2) Definitions and special rules.--
                    ``(A) Employment tax.--For purposes of this 
                subsection, the term `employment tax' means any tax 
                imposed by subtitle C, including any interest, penalty, 
                or additional amount with respect to such tax.
                    ``(B) No refund or credit of overpayment.--No 
                refund or credit of any overpayment of an employment 
                tax resulting from the application of paragraph (1) 
                shall be allowed, notwithstanding that the period for 
                filing a claim for refund or credit of such overpayment 
                is not barred on the effective date of this 
                subsection.''
    (b) Modifications to Safe Harbor for Classifications of Individuals 
as Nonemployees.--
            (1) Requirement of reasonable basis.--Paragraph (1) of 
        section 530(a) of the Revenue Act of 1978 (relating to 
        controversies involving whether individuals are employees for 
        purposes of the employment taxes) is amended by striking 
        ``unless the taxpayer had no reasonable basis'' and inserting 
        the following: ``if the taxpayer had a reasonable basis''.
            (2) Repeal of prior audit as reasonable basis, etc.--
        Paragraph (2) of section 530(a) of the Revenue Act of 1978 is 
        amended--
                    (A) by striking the paragraph caption and inserting 
                the following: ``Reasonable basis for not treating 
                individual as employee.--'',
                    (B) in the matter preceding subparagraph (A)--
                            (i) by striking ``in any case'', and
                            (ii) by inserting ``only'' before ``if the 
                        taxpayer's'',
                    (C) by adding ``or'' at the end of subparagraph 
                (A), and
                    (D) by striking subparagraph (B) and by 
                redesignating subparagraph (C) as subparagraph (B).
    (c) Authority for Regulations and Rulings on Employment Status.--
Section 530 of the Revenue Act of 1978 is amended by striking 
subsection (b) and by redesignating subsections (c) and (d) as 
subsections (b) and (c), respectively.
    (d) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        take effect beginning on the date which is 120 days after the 
        date of the enactment of this Act.
            (2) Modifications to safe harbor.--The amendments made by 
        subsection (b) shall apply to periods ending on or after the 
        date which is 120 days after the date of the enactment of this 
        Act.

SEC. 302. FEDERAL CONTRACTS.

    (a) Classification of Persons as Employees and Independent 
Contractors Under Certain Procurement Contracts.--(1) Title III of the 
Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251 
et seq.) is amended by adding at the end the following new section:

``SEC. 312. CLASSIFICATION OF PERSONS AS EMPLOYEES AND INDEPENDENT 
              CONTRACTORS.

    ``(a) Ineligibility for Government Contracts and Subcontracts.--(1) 
A person (including any subsidiary, successor, or related entity of a 
person) shall not be eligible for a contract during the 2-year period 
beginning on the date of the issuance of any final determination under 
Federal law that the person (including any subsidiary or related entity 
of the person) willfully misclassified an individual for purposes of 
any employment tax.
    ``(2) For purposes of this subsection, a determination is final if 
all rights to appeal the determination, or to request a review, 
rehearing, or redetermination of the matter that is the subject of the 
determination, have been exhausted or have lapsed.
    ``(b) Certification of Adequacy of Bids to Pay Employment Taxes.--A 
person who submits a bid or proposal for a contract shall certify that 
the amount of the bid or proposal is adequate to pay all employment 
taxes with respect to all work to be performed under the contract by 
employees of the person.
    ``(c) Notification of Independent Contractors.--Each contract shall 
include a requirement that the contractor provide, to each person who 
performs work under the contract and who is treated by the contractor 
as an independent contractor for purposes of employment taxes, a 
notification regarding--
            ``(1) all obligations of the independent contractor under 
        Federal and State law to withhold and pay employment taxes with 
        respect to work performed under the contract by the independent 
        contractor (including work performed by employees of the 
        independent contractor); and
            ``(2) all statutory rights and protections that are 
        available under Federal and State law to employees of the 
        contractor and are not available to the independent contractor 
        (including employees of the independent contractor), including 
        rights and protections under the Fair Labor Standards Act of 
        1938, the Occupational Safety and Health Act of 1978, and title 
        VII of the Civil Rights Act of 1964.
    ``(d) Right of Action.--A person who submits a bid or proposal for 
a contract and who suffers damages as a result of the award of the 
contract to a person who knowingly and willfully submits a 
certification under subsection (b) with respect to the contract that is 
false, may bring an action for damages against the person awarded the 
contract in any district court of the United States in which the 
defendant is located.
    ``(e) Definitions.--As used in this section:
            ``(1) The term `employment tax' means any tax imposed by 
        subtitle C of the Internal Revenue Code of 1986.
            ``(2) The term `contract' means a contract that is entered 
        into by an executive agency under this title, and all 
        subcontracts under such a contract.
            ``(3) The term `misclassify' means to treat as an 
        independent contractor an individual who is an employee.''.
    (2) The table of contents in the first section of the Federal 
Property and Administrative Services Act of 1949 is amended by 
inserting after the item relating to the last section in title III the 
following new item:

``Sec. 312. Classification of persons as employees and independent 
                            contractors.''.
    (b) Applicability.--Section 312 of the Federal Property and 
Administrative Services Act of 1949, as added by subsection (a), shall 
apply to--
            (1) contracts entered into under title III of such Act 
        after the expiration of the 180-day period beginning on the 
        date of the enactment of this Act;
            (2) subcontracts under contracts covered by paragraph (1); 
        and
            (3) options exercised under any such contract after the 
        expiration of the 180-day period beginning on the date of the 
        enactment of this Act.

SEC. 303. DEFENSE CONTRACTS.

    (a) Classification of Persons as Employees and Independent 
Contractors Under Defense Contracts.--(1) Chapter 141 of title 10, 
United States Code, is amended by inserting after section 2393 the 
following new section:
``Sec. 2393a. Classification of persons as employees and independent 
              contractors
    ``(a) Ineligibility for Defense Contracts and Subcontracts.--(1) A 
person (including any subsidiary, successor, or related entity of a 
person) shall not be eligible for a contract during the 2-year period 
beginning on the date of the issuance of any final determination under 
Federal law that the person (including any subsidiary or related entity 
of the person) willfully misclassified an individual for purposes of 
any employment tax.
    ``(2) For purposes of this subsection, a determination is final if 
all rights to appeal the determination, or to request a review, 
rehearing, or redetermination of the matter that is the subject of the 
determination, have been exhausted or have lapsed.
    ``(b) Certification of Adequacy of Bids to Pay Employment Taxes.--A 
person who submits a bid or proposal for a contract shall certify that 
the amount of the bid or proposal is adequate to pay all employment 
taxes with respect to all work to be performed under the contract by 
employees of the person.
    ``(c) Notification of Independent Contractors.--Each contract shall 
include a requirement that the contractor shall provide, to each person 
who performs work under the contract and who is treated by the 
contractor as an independent contractor for purposes of employment 
taxes, a notification regarding--
            ``(1) all obligations of the independent contractor under 
        Federal and State law to withhold and pay employment taxes with 
        respect to work performed under the contract by the independent 
        contractor (including work performed by employees of the 
        independent contractor); and
            ``(2) all statutory rights and protections that are 
        available under Federal and State law to employees of the 
        contractor and are not available to the independent contractor 
        (including employees of the independent contractor), including 
        rights and protections under the Fair Labor Standards Act of 
        1938, the Occupational Safety and Health Act of 1978, and title 
        VII of the Civil Rights Act of 1964.
    ``(d) Right of Action.--A person who submits a bid or proposal for 
a contract and who suffers damages as a result of the award of the 
contract to a person who knowingly and willfully submits a 
certification under subsection (b) with respect to the contract that is 
false, may bring an action for damages against the person awarded the 
contract in any district court of the United States in which the 
defendant is located.
    ``(e) Applicability.--This section applies to contracts entered 
into under chapter 137 of this title.
    ``(f) Definitions.--In this section:
            ``(1) The term `employment tax' means any tax imposed by 
        subtitle C of the Internal Revenue Code of 1986.
            ``(2) The term `contract' includes subcontracts.
            ``(3) The term `misclassify' means to treat as an 
        independent contractor an individual who is an employee.''.
    (2) The table of sections at the beginning of such chapter is 
amended by adding at the end the following new item:

``2393a. Classification of persons as employees and independent 
                            contractors.''.
    (b) Applicability.--Section 2393a of title 10, United States Code, 
as added by subsection (a), shall apply to--
            (1) contracts entered into under chapter 137 of title 10, 
        United States Code, after the expiration of the 180-day period 
        beginning on the date of the enactment of this Act;
            (2) subcontracts under contracts covered by paragraph (1); 
        and
            (3) options exercised under any such contract after the 
        expiration of the 180-day period beginning on the date of the 
        enactment of this Act.

                 TITLE IV--FEDERAL TEMPORARY EMPLOYEES

SEC. 401. LIMITATION ON TEMPORARY EMPLOYMENT.

    It is the sense of Congress that--
            (1) the Federal Government has appointed and maintained 
        employees in temporary positions that are not appropriate for 
        temporary appointments, both by virtue of the type of work and 
        the extended lengths of service in some cases;
            (2) when a vacancy occurs in a position that was filled 
        continuously by a temporary employee in the year preceding the 
        vacancy, the Federal Government should not fill such vacancy 
        with a temporary employee, regardless of whether the individual 
        previously employed would refill such position;
            (3) when a vacancy occurs in a position as described under 
        paragraph (2), the Federal Government should not establish a 
        successor position and fill it with a temporary employee; and
            (4) when a vacancy occurs in a position that was filled 
        continuously by a temporary employee in the year preceding the 
        vacancy, and the Federal Government determines there is a need 
        for the services performed in such position, the Federal 
        Government should establish a permanent or term position to 
        fill such need whenever feasible.

SEC. 402. HEALTH BENEFITS.

    (a) Elimination of Service Requirement and Employee Payment of 
Government Contribution.--Section 8906a of title 5, United States Code, 
is amended to read as follows:
``Sec. 8906a. Temporary employees
    ``The Office of Personnel Management shall prescribe regulations to 
provide for offering health benefits plans to temporary employees under 
the provisions of this chapter.''.
    (b) Inclusion of Temporary Employees.--Section 8913(b) of title 5, 
United States Code, is amended--
            (1) in the second sentence by striking out ``, such as 
        short-term appointment, seasonal or intermittent employment, 
        and employment of like nature''; and
            (2) in paragraph (4) by striking out ``and is eligible 
        under section 8906a(a)''.

SEC. 403. RETIREMENT BENEFITS.

    (a) Inclusion of Certain Temporary Employees Under Civil Service 
Retirement System.--The second sentence of section 8347(g) of title 5, 
United States Code, is amended by inserting before the period ``or any 
temporary employee who, in the aggregate, has completed 5 years of 
service (in the same or different positions), including service as a 
temporary employee.''.
    (b) Inclusion of Certain Temporary Employees Under Federal 
Employees Retirement System.--Section 8402(c)(1) of title 5, United 
States Code, is amended by inserting before the period ``or any 
temporary employee who, in the aggregate, has completed 5 years of 
service (in the same or different positions), including service as a 
temporary employee''.
    (c) Creditability of Service.--In administering the amendments made 
under this section, service may be taken into account whether performed 
before, on, or after the date of the enactment of this Act, for all 
purposes of chapters 83 and 84 of title 5, United States Code 
(including employee and Government contributions relating to such 
service and the computation of annuities). An employee shall have 
service as a temporary employee (which would otherwise be excluded 
except for the amendments made under subsections (a) and (b) and for 
which no employee contributions have been made) used for the 
computation of an annuity under chapters 83 and 84 of title 5, United 
States Code (as amended by this Act) if the employee deposits such 
contributions (including interest) as determined by the Office of 
Personnel Management relating to such service into the Civil Service 
Retirement and Disability Fund. All appropriate employing agencies 
shall pay the applicable contributions into the Civil Service 
Retirement and Disability Fund. The Office of Personnel Management 
shall prescribe regulations to carry out the provisions of this 
subsection.

SEC. 404. LIFE INSURANCE BENEFITS.

    Section 8716(b) of title 5, United States Code, is amended--
            (1) in the second sentence, by striking out ``, such as 
        short-term appointment, seasonal, intermittent employment, and 
        employment of like nature'';
            (2) in paragraph (2) by striking out ``or'' after the 
        semicolon;
            (3) in paragraph (3) by striking out the period and 
        inserting in lieu thereof ``; or''; and
            (4) by adding at the end thereof the following:
            ``(4) a temporary employee who has completed 6 months of 
        current continuous employment (in the same position or 
        different positions), including service as a temporary 
        employee, excluding any break in service of 5 days or less.''.
                                 <all>
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