I

104TH CONGRESS

2D SESSION H. R. 3682

To allow certain individuals seeking part-time employment to be eligible to

receive unemployment compensation, to require the Secretary of Labor

to establish and carry out an annual survey relating to temporary workers, to protect part-time and temporary workers relating to pension

and group health plans, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 19, 1996

Mrs. SCHROEDER introduced the following bill; which was referred to the

Committee on Ways and Means, and in addition to the Committees on

Economic and Educational Opportunities, Government Reform and Oversight, and National Security, for a period to be subsequently determined

by the Speaker, in each case for consideration of such provisions as fall

within the jurisdiction of the committee concerned

A BILL

To allow certain individuals seeking part-time employment

to be eligible to receive unemployment compensation, to

require the Secretary of Labor to establish and carry

out an annual survey relating to temporary workers,

to protect part-time and temporary workers relating to

pension and group health plans, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Part-Time and Tem3 porary Workers Protection Act of 1996’’.

4 TITLE I—PROTECTION OF PART5 TIME AND TEMPORARY

6 WORKERS

7 SEC. 101. ELIGIBILITY FOR UNEMPLOYMENT COMPENSA8 TION OF CERTAIN INDIVIDUALS SEEKING

9 PART-TIME EMPLOYMENT.

10 (a) GENERAL RULE.—Subsection (a) of section 3304

11 of the Internal Revenue Code of 1986 (relating to require12 ments for approval of State unemployment compensation

13 laws) is amended by striking ‘‘and’’ at the end of para14 graph (18), by redesignating paragraph (19) as paragraph

15 (20), and by inserting after paragraph (18) the following

16 new paragraph:

17 ‘‘(19) in applying the State law provisions relat18 ing to availability for work, active search for work,

19 or refusal to accept work, the term ‘suitable work’

20 shall not include any work where the individual

21 would normally perform services for more hours per

22 week than the number of hours per week for which

23 the individual normally performed services in the in24 dividual’s last job in the base period, and’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall take effect on the date of the enact3 ment of this Act.

4 SEC. 102. ANNUAL BUREAU OF LABOR STATISTICS SURVEY

5 RELATING TO TEMPORARY WORKERS.

6 The Secretary of Labor, acting through the Commis7 sioner of the Bureau of Labor Statistics, shall establish

8 and carry out an annual survey identifying—

9 (1) the characteristics of temporary workers in

10 the United States;

11 (2) the relationship between such workers and

12 the establishments at which such workers are tempo13 rarily employed; and

14 (3) where appropriate, the relationship between

15 such workers and their permanent employers.

16 SEC. 103. PROTECTION OF PART-TIME AND TEMPORARY

17 WORKERS.

18 (a) TREATMENT OF EMPLOYEES WORKING AT LESS

19 THAN FULL-TIME UNDER PARTICIPATION, VESTING, AND

20 ACCRUAL RULES GOVERNING PENSION PLANS.—

21 (1) PARTICIPATION RULES.—

22 (A) IN GENERAL.—Section 202(a)(3) of

23 the Employee Retirement Income Security Act

24 of 1974 (29 U.S.C. 1052(a)(3)) is amended by
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1 adding at the end the following new subpara2 graph:

3 ‘‘(E)(i) For purposes of this paragraph, in the case

4 of any employee who, as of the beginning of the 12-month

5 period referred to in subparagraph (A)—

6 ‘‘(I) has customarily completed 500 or more

7 hours of service per year but less than 1,000 hours

8 of service per year, or

9 ‘‘(II) is employed in a type of position in which

10 employment customarily constitutes 500 or more

11 hours of service per year but less than 1,000 hours

12 of service per year,

13 completion of 500 hours of service within such 12-month

14 period shall be treated as completion of 1,000 hours of

15 service.

16 ‘‘(ii) For purposes of this subparagraph, the extent

17 to which employment in any type of position customarily

18 constitutes less than 1,000 hours of service per year shall

19 be determined with respect to each pension plan in accord20 ance with such regulations as the Secretary may prescribe

21 providing for consideration of facts and circumstances pe22 culiar to the work-force constituting the participants in

23 such plan.’’.

24 (B) CONFORMING AMENDMENT.—Section

25 204(b)(1)(E) of such Act (29 U.S.C.
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1 1054(b)(1)(E)) is amended by striking ‘‘section

2 202(a)(3)(A)’’ and inserting ‘‘subparagraphs

3 (A) and (E) of section 202(a)(3)’’.

4 (2) VESTING RULES.—

5 (A) IN GENERAL.—Section 203(b)(2) of

6 such Act (29 U.S.C. 1053(b)(2)) is amended by

7 adding at the end the following new subpara8 graph:

9 ‘‘(E)(i) For purposes of this paragraph, in the case

10 of any employee who, as of the beginning of the period

11 designated by the plan pursuant to subparagraph (A)—

12 ‘‘(I) has customarily completed 500 or more

13 hours of service per year but less than 1,000 hours

14 of service per year, or

15 ‘‘(II) is employed in a type of position in which

16 employment customarily constitutes 500 or more

17 hours of service per year but less than 1,000 hours

18 of service per year,

19 completion of 500 hours of service within such period shall

20 be treated as completion of 1,000 hours of service.

21 ‘‘(ii) For purposes of this subparagraph, the extent

22 to which employment in any type of position customarily

23 constitutes less than 1,000 hours of service per year shall

24 be determined with respect to each pension plan in accord25 ance with such regulations as the Secretary may prescribe
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1 providing for consideration of facts and circumstances pe2 culiar to the work-force constituting the participants in

3 such plan.’’.

4 (B) 1-YEAR BREAKS IN SERVICE.—Section

5 203(b)(3) of such Act (29 U.S.C. 1053(b)(3))

6 is amended by adding at the end the following

7 new subparagraph:

8 ‘‘(F)(i) For purposes of this paragraph, in the case

9 of any employee who, as of the beginning of the period

10 designated by the plan pursuant to subparagraph (A)—

11 ‘‘(I) has customarily completed 500 or more

12 hours of service per year but less than 1,000 hours

13 of service per year, or

14 ‘‘(II) is employed in a type of position in which

15 employment customarily constitutes 500 or more

16 hours of service per year but less than 1,000 hours

17 of service per year,

18 completion of 250 hours of service within such period shall

19 be treated as completion of 500 hours of service.

20 ‘‘(ii) For purposes of this subparagraph, the extent

21 to which employment in any type of position customarily

22 constitutes less than 1,000 hours of service per year shall

23 be determined with respect to each pension plan in accord24 ance with such regulations as the Secretary may prescribe

25 providing for consideration of facts and circumstances pe-
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1 culiar to the work-force constituting the participants in

2 such plan.’’.

3 (3) ACCRUAL RULES.—Section 204(b)(4)(C) of

4 such Act (29 U.S.C. 1054(b)(4)(C)) is amended—

5 (A) by inserting ‘‘(i)’’ after ‘‘(C)’’; and

6 (B) by adding at the end the following new

7 clauses:

8 ‘‘(ii) For purposes of this subparagraph, in the case

9 of any employee who, as of the beginning of the period

10 designated by the plan pursuant to clause (i)—

11 ‘‘(I) has customarily completed 500 or more

12 hours of service per year but less than 1,000 hours

13 of service per year, or

14 ‘‘(II) is employed in a type of position in which

15 employment customarily constitutes 500 or more

16 hours of service per year but less than 1,000 hours

17 of service per year,

18 completion of 500 hours of service within such period shall

19 be treated as completion of 1,000 hours of service.

20 ‘‘(iii) For purposes of clause (ii), the extent to which

21 employment in any type of position customarily constitutes

22 less than 1,000 hours of service per year shall be deter23 mined with respect to each pension plan in accordance

24 with such regulations as the Secretary may prescribe pro25 viding for consideration of facts and circumstances pecu-
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1 liar to the work-force constituting the participants in such

2 plan.’’.

3 (b) TREATMENT OF EMPLOYEES WORKING AT LESS

4 THAN FULL-TIME UNDER GROUP HEALTH PLANS.

5 (1) IN GENERAL.—Part 2 of subtitle B of title

6 I of such Act is amended—

7 (A) by redesignating section 211 (29

8 U.S.C. 1061) as section 212; and

9 (B) by inserting after section 210 (29

10 U.S.C. 1060) the following new section:

11 ‘‘TREATMENT OF PART-TIME WORKERS UNDER GROUP

12 HEALTH PLANS

13 ‘‘SEC. 211. (a) IN GENERAL.—A reduction in the em14 ployer-provided premium under a group health plan with

15 respect to any employee for any period of coverage solely

16 because the employee’s customary employment is less than

17 full-time may be provided under such plan only if the em18 ployee is described in subsection (b) and only to the extent

19 permitted under subsection (c).

20 ‘‘(b) REDUCTIONS APPLICABLE TO EMPLOYEES

21 WORKING LESS THAN FULL-TIME.—

22 ‘‘(1) IN GENERAL.—An employee is described in

23 this subsection if such employee, as of the beginning

24 of the period of coverage referred to in subsection

25 (a)—
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1 ‘‘(A) has customarily completed less than

2 30 hours of service per week, or

3 ‘‘(B) is employed in a type of position in

4 which employment customarily constitutes less

5 than 30 hours of service per week.

6 ‘‘(2) REGULATIONS.—For purposes of para7 graph (1), whether employment in any type of posi8 tion customarily constitutes less than 30 hours of

9 service per week shall be determined with respect to

10 each group health plan in accordance with such reg11 ulations as the Secretary may prescribe providing

12 for consideration of facts and circumstances peculiar

13 to the work force constituting the participants in

14 such plan.

15 ‘‘(c) AMOUNT OF PERMISSIBLE REDUCTION.—The

16 employer-provided premium under a group health plan

17 with respect to any employee for any period of coverage,

18 after the reduction permitted under subsection (a), shall

19 not be less than a ratable portion of the employer-provided

20 premium which would be provided under such plan for

21 such period of coverage with respect to an employee who

22 completes 30 hours of service per week.

23 ‘‘(d) DEFINITIONS.—For purposes of this section—
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1 ‘‘(1) GROUP HEALTH PLAN.—The term ‘group

2 health plan’ has the meaning provided such term in

3 section 607(1).

4 ‘‘(2) EMPLOYER-PROVIDED PREMIUM.—

5 ‘‘(A) IN GENERAL.—The term ‘employer6 provided premium’ under a plan for any period

7 of coverage means the portion of the applicable

8 premium under the plan for such period of cov9 erage which is attributable under the plan to

10 employer contributions.

11 ‘‘(B) APPLICABLE PREMIUM.—For pur12 poses of subparagraph (A), in determining the

13 applicable premium of a group health plan,

14 principles similar to the principles applicable

15 under section 604 shall apply.’’.

16 (2) CONFORMING AMENDMENTS.—

17 (A) Section 201(1) of such Act (29 U.S.C.

18 1051(1)) is amended by inserting ‘‘, except with

19 respect to section 211’’ before the semicolon.

20 (B) The table of contents in section 1 of

21 such Act is amended by striking the item relat22 ing to section 211 and inserting the following

23 new items:

‘‘Sec. 211. Treatment of part-time workers under group health plans.

‘‘Sec. 212. Effective date.’’.
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1 (c) EXPANSION OF DEFINITION OF EMPLOYEE TO

2 INCLUDE CERTAIN INDIVIDUALS WHOSE SERVICES ARE

3 LEASED OR CONTRACTED FOR.—Paragraph (6) of section

4 3 of such Act (29 U.S.C. 1002(6)) is amended—

5 (1) by inserting ‘‘(A)’’ after ‘‘(6)’’; and

6 (2) by adding at the end the following new sub7 paragraph:

8 ‘‘(B) Such term includes, with respect to any em9 ployer, any person who is not an employee (within the

10 meaning of subparagraph (A)) of such employer and who

11 provides services to such employer, if—

12 ‘‘(i) such person has (pursuant to an agreement

13 with such employer or any other person) performed

14 such services for such employer (or for such em15 ployer and related persons (within the meaning of

16 section 144(a)(3) of the Internal Revenue Code of

17 1986)) for a period of at least 1 year (6 months in

18 the case of core health benefits) at the rate of at

19 least 500 hours of service per year, and

20 ‘‘(ii) such services are of a type historically per21 formed, in the business field of the employer, by em22 ployees (within the meaning of subparagraph (A)).’’.

23 (d) EFFECTIVE DATES.—

24 (1) IN GENERAL.—Except as provided in para25 graph (2), the amendments made by this section
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1 shall apply with respect to plan years beginning on

2 or after January 1, 1997.

3 (2) SPECIAL RULE FOR COLLECTIVELY BAR4 GAINED PLANS.—In the case of a plan maintained

5 pursuant to 1 or more collective bargaining agree6 ments between employee representatives and 1 or

7 more employers ratified on or before the date of the

8 enactment of this Act, paragraph (1) shall be ap9 plied to benefits pursuant to, and individuals covered

10 by, any such agreement by substituting for ‘‘Janu11 ary 1, 1997’’ the date of the commencement of the

12 first plan year beginning on or after the earlier of—

13 (A) the later of—

14 (i) January 1, 1997, or

15 (ii) the date on which the last of such

16 collective bargaining agreements termi17 nates (determined without regard to any

18 extension thereof after the date of the en19 actment of this Act), or

20 (B) January 1, 1999.

21 (3) PLAN AMENDMENTS.—If any amendment

22 made by this section requires an amendment to any

23 plan, such plan amendment shall not be required to

24 be made before the first plan year beginning on or

25 after January 1, 1998, if—
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1 (A) during the period after such amend2 ment made by this section takes effect and be3 fore such first plan year, the plan is operated

4 in accordance with the requirements of such

5 amendment made by this section, and

6 (B) such plan amendment applies retro7 actively to the period after such amendment

8 made by this section takes effect and such first

9 plan year.

10 A plan shall not be treated as failing to provide defi11 nitely determinable benefits or contributions, or to

12 be operated in accordance with the provisions of the

13 plan, merely because it operates in accordance with

14 this paragraph.

15 TITLE II—MISCLASSIFICATION

16 OF EMPLOYEES AS INDE17 PENDENT CONTRACTORS

18 SEC. 201. INTERNAL REVENUE SERVICE PROCEDURES.

19 (a) WAIVER OF EMPLOYMENT TAX LIABILITY FOR

20 REASONABLE GOOD FAITH MISCLASSIFICATION BASED

21 ON COMMON LAW RULES.—Section 3509 of the Internal

22 Revenue Code of 1986 (relating to determination of em23 ployer’s liability for certain employment taxes) is amended

24 by adding at the end the following new subsection:
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1 ‘‘(e) WAIVER OF EMPLOYMENT TAX LIABILITY FOR

2 REASONABLE GOOD FAITH MISCLASSIFICATION BASED

3 ON COMMON LAW RULES.—

4 ‘‘(1) IN GENERAL.—For purposes of determin5 ing the liability of any taxpayer for employment

6 taxes with respect to any individual for any period,

7 such individual shall be deemed not to have been an

8 employee of the taxpayer for such period if—

9 ‘‘(A) the taxpayer did not treat such indi10 vidual as an employee for purposes of the em11 ployment taxes for such period,

12 ‘‘(B) the taxpayer’s treatment of such indi13 vidual as not being an employee was based on

14 a reasonable good faith misapplication of the

15 common law rules used for determining the em16 ployer-employee relationship,

17 ‘‘(C) all Federal tax returns (including in18 formation returns) required to be filed by the

19 taxpayer with respect to such individual for

20 such period were filed on a basis consistent with

21 the taxpayer’s treatment of such individual as

22 not being an employee,

23 ‘‘(D) the taxpayer (and any predecessor)

24 did not treat any other individual holding a

25 substantially similar position as an employee for
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1 purposes of the employment taxes for any pe2 riod beginning after December 31, 1977, and

3 ‘‘(E) the taxpayer enters into a closing

4 agreement under section 7121 with the Sec5 retary (in the time and manner determined by

6 the Secretary) agreeing to treat such individual,

7 and any other individual holding a substantially

8 similar position, as employees and to file all

9 Federal employment tax returns with respect to

10 such individuals on a basis consistent with the

11 taxpayer’s treatment of such individuals as em12 ployees.

13 ‘‘(2) DEFINITIONS AND SPECIAL RULES.—

14 ‘‘(A) EMPLOYMENT TAX.—For purposes of

15 this subsection, the term ‘employment tax’

16 means any tax imposed by subtitle C, including

17 any interest, penalty, or additional amount with

18 respect to such tax.

19 ‘‘(B) NO REFUND OR CREDIT OF OVERPAY20 MENT.—No refund or credit of any overpay21 ment of an employment tax resulting from the

22 application of paragraph (1) shall be allowed,

23 notwithstanding that the period for filing a

24 claim for refund or credit of such overpayment
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1 is not barred on the effective date of this sub2 section.’’

3 (b) MODIFICATIONS TO SAFE HARBOR FOR CLASSI4 FICATIONS OF INDIVIDUALS AS NONEMPLOYEES.—

5 (1) REQUIREMENT OF REASONABLE BASIS.—

6 Paragraph (1) of section 530(a) of the Revenue Act

7 of 1978 (relating to controversies involving whether

8 individuals are employees for purposes of the em9 ployment taxes) is amended by striking ‘‘unless the

10 taxpayer had no reasonable basis’’ and inserting the

11 following: ‘‘if the taxpayer had a reasonable basis’’.

12 (2) REPEAL OF PRIOR AUDIT AS REASONABLE

13 BASIS, ETC.—Paragraph (2) of section 530(a) of the

14 Revenue Act of 1978 is amended—

15 (A) by striking the paragraph caption and

16 inserting the following: ‘‘REASONABLE BASIS

17 FOR NOT TREATING INDIVIDUAL AS EM18 PLOYEE.—’’,

19 (B) in the matter preceding subparagraph

20 (A)—

21 (i) by striking ‘‘in any case’’, and

22 (ii) by inserting ‘‘only’’ before ‘‘if the

23 taxpayer’s’’,

24 (C) by adding ‘‘or’’ at the end of subpara25 graph (A), and
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1 (D) by striking subparagraph (B) and by

2 redesignating subparagraph (C) as subpara3 graph (B).

4 (c) AUTHORITY FOR REGULATIONS AND RULINGS ON

5 EMPLOYMENT STATUS.—Section 530 of the Revenue Act

6 of 1978 is amended by striking subsection (b) and by re7 designating subsections (c) and (d) as subsections (b) and

8 (c), respectively.

9 (d) EFFECTIVE DATES.—

10 (1) IN GENERAL.—The amendments made by

11 this section shall take effect beginning on the date

12 which is 120 days after the date of the enactment

13 of this Act.

14 (2) MODIFICATIONS TO SAFE HARBOR.—The

15 amendments made by subsection (b) shall apply to

16 periods ending on or after the date which is 120

17 days after the date of the enactment of this Act.

18 SEC. 202. FEDERAL CONTRACTS.

19 (a) CLASSIFICATION OF PERSONS AS EMPLOYEES

20 AND INDEPENDENT CONTRACTORS UNDER CERTAIN

21 PROCUREMENT CONTRACTS.—(1) Title III of the Federal

22 Property and Administrative Services Act of 1949 (41

23 U.S.C. 251 et seq.) is amended by adding at the end the

24 following new section:
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1 ‘‘SEC. 317. CLASSIFICATION OF PERSONS AS EMPLOYEES

2 AND INDEPENDENT CONTRACTORS.

3 ‘‘(a) INELIGIBILITY FOR GOVERNMENT CONTRACTS

4 AND SUBCONTRACTS.—(1) A person (including any sub5 sidiary, successor, or related entity of a person) shall not

6 be eligible for a contract during the 2-year period begin7 ning on the date of the issuance of any final determination

8 under Federal law that the person (including any subsidi9 ary or related entity of the person) willfully misclassified

10 an individual for purposes of any employment tax.

11 ‘‘(2) For purposes of this subsection, a determination

12 is final if all rights to appeal the determination, or to re13 quest a review, rehearing, or redetermination of the mat14 ter that is the subject of the determination, have been ex15 hausted or have lapsed.

16 ‘‘(b) CERTIFICATION OF ADEQUACY OF BIDS TO PAY

17 EMPLOYMENT TAXES.—A person who submits a bid or

18 proposal for a contract shall certify that the amount of

19 the bid or proposal is adequate to pay all employment

20 taxes with respect to all work to be performed under the

21 contract by employees of the person.

22 ‘‘(c) NOTIFICATION OF INDEPENDENT CONTRAC23 TORS.—Each contract shall include a requirement that the

24 contractor provide, to each person who performs work

25 under the contract and who is treated by the contractor
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1 as an independent contractor for purposes of employment

2 taxes, a notification regarding—

3 ‘‘(1) all obligations of the independent contrac4 tor under Federal and State law to withhold and pay

5 employment taxes with respect to work performed

6 under the contract by the independent contractor

7 (including work performed by employees of the inde8 pendent contractor); and

9 ‘‘(2) all statutory rights and protections that

10 are available under Federal and State law to em11 ployees of the contractor and are not available to the

12 independent contractor (including employees of the

13 independent contractor), including rights and protec14 tions under the Fair Labor Standards Act of 1938,

15 the Occupational Safety and Health Act of 1978,

16 and title VII of the Civil Rights Act of 1964.

17 ‘‘(d) RIGHT OF ACTION.—A person who submits a

18 bid or proposal for a contract and who suffers damages

19 as a result of the award of the contract to a person who

20 knowingly and willfully submits a certification under sub21 section (b) with respect to the contract that is false, may

22 bring an action for damages against the person awarded

23 the contract in any district court of the United States in

24 which the defendant is located.

25 ‘‘(e) DEFINITIONS.—As used in this section:
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1 ‘‘(1) The term ‘employment tax’ means any tax

2 imposed by subtitle C of the Internal Revenue Code

3 of 1986.

4 ‘‘(2) The term ‘contract’ means a contract that

5 is entered into by an executive agency under this

6 title, and all subcontracts under such a contract.

7 ‘‘(3) The term ‘misclassify’ means to treat as

8 an independent contractor an individual who is an

9 employee.’’.

10 (2) The table of contents in section 1 of the Federal

11 Property and Administrative Services Act of 1949 is

12 amended by inserting after the item relating to the last

13 section in title III the following new item:

‘‘Sec. 317. Classification of persons as employees and independent contractors.’’.

14 (b) APPLICABILITY.—Section 317 of the Federal

15 Property and Administrative Services Act of 1949, as

16 added by subsection (a), shall apply to—

17 (1) contracts entered into under title III of

18 such Act after the expiration of the 180-day period

19 beginning on the date of the enactment of this Act;

20 (2) subcontracts under contracts covered by

21 paragraph (1); and

22 (3) options exercised under any such contract

23 after the expiration of the 180-day period beginning

24 on the date of the enactment of this Act.
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1 SEC. 203. DEFENSE CONTRACTS.

2 (a) CLASSIFICATION OF PERSONS AS EMPLOYEES

3 AND INDEPENDENT CONTRACTORS UNDER DEFENSE

4 CONTRACTS.—(1) Chapter 141 of title 10, United States

5 Code, is amended by inserting after section 2393 the fol6 lowing new section:

7 ‘‘§ 2393a. Classification of persons as employees and

8 independent contractors

9 ‘‘(a) INELIGIBILITY FOR DEFENSE CONTRACTS AND

10 SUBCONTRACTS.—(1) A person (including any subsidiary,

11 successor, or related entity of a person) shall not be eligi12 ble for a contract during the 2-year period beginning on

13 the date of the issuance of any final determination under

14 Federal law that the person (including any subsidiary or

15 related entity of the person) willfully misclassified an indi16 vidual for purposes of any employment tax.

17 ‘‘(2) For purposes of this subsection, a determination

18 is final if all rights to appeal the determination, or to re19 quest a review, rehearing, or redetermination of the mat20 ter that is the subject of the determination, have been ex21 hausted or have lapsed.

22 ‘‘(b) CERTIFICATION OF ADEQUACY OF BIDS TO PAY

23 EMPLOYMENT TAXES.—A person who submits a bid or

24 proposal for a contract shall certify that the amount of

25 the bid or proposal is adequate to pay all employment
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1 taxes with respect to all work to be performed under the

2 contract by employees of the person.

3 ‘‘(c) NOTIFICATION OF INDEPENDENT CONTRAC4 TORS.—Each contract shall include a requirement that the

5 contractor shall provide, to each person who performs

6 work under the contract and who is treated by the contrac7 tor as an independent contractor for purposes of employ8 ment taxes, a notification regarding—

9 ‘‘(1) all obligations of the independent contrac10 tor under Federal and State law to withhold and pay

11 employment taxes with respect to work performed

12 under the contract by the independent contractor

13 (including work performed by employees of the inde14 pendent contractor); and

15 ‘‘(2) all statutory rights and protections that

16 are available under Federal and State law to em17 ployees of the contractor and are not available to the

18 independent contractor (including employees of the

19 independent contractor), including rights and protec20 tions under the Fair Labor Standards Act of 1938,

21 the Occupational Safety and Health Act of 1978,

22 and title VII of the Civil Rights Act of 1964.

23 ‘‘(d) RIGHT OF ACTION.—A person who submits a

24 bid or proposal for a contract and who suffers damages

25 as a result of the award of the contract to a person who
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1 knowingly and willfully submits a certification under sub2 section (b) with respect to the contract that is false, may

3 bring an action for damages against the person awarded

4 the contract in any district court of the United States in

5 which the defendant is located.

6 ‘‘(e) APPLICABILITY.—This section applies to con7 tracts entered into under chapter 137 of this title.

8 ‘‘(f) DEFINITIONS.—In this section:

9 ‘‘(1) The term ‘employment tax’ means any tax

10 imposed by subtitle C of the Internal Revenue Code

11 of 1986.

12 ‘‘(2) The term ‘contract’ includes subcontracts.

13 ‘‘(3) The term ‘misclassify’ means to treat as

14 an independent contractor an individual who is an

15 employee.’’.

16 (2) The table of sections at the beginning of such

17 chapter is amended by inserting after the item relating

18 to section 2393 the following new item:

‘‘2393a. Classification of persons as employees and independent contractors.’’.

19 (b) APPLICABILITY.—Section 2393a of title 10, Unit20 ed States Code, as added by subsection (a), shall apply

21 to—

22 (1) contracts entered into under chapter 137 of

23 title 10, United States Code, after the expiration of

24 the 180-day period beginning on the date of the en25 actment of this Act;
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1 (2) subcontracts under contracts covered by

2 paragraph (1); and

3 (3) options exercised under any such contract

4 after the expiration of the 180-day period beginning

5 on the date of the enactment of this Act.

Æ