I
107TH CONGRESS
2D SESSION
H. R. 4099
To amend the Internal Revenue Code of 1986 to clarify the status of employee
leasing organizations and to promote and protect the interests of em-
ployee leasing organizations, their customers, and workers.
IN THE HOUSE OF REPRESENTATIVES
APRIL 9, 2002
Mr. CRANE (for himself, Mr. JEFFERSON, and Mr. LEWIS of Kentucky) intro-
duced the following bill; which was referred to the Committee on Ways
and Means
A BILL
To amend the Internal Revenue Code of 1986 to clarify
the status of employee leasing organizations and to pro-
mote and protect the interests of employee leasing orga-
nizations, their customers, and workers.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Employee Leasing Or-
ganization Act of 2002’’.
SEC. 2. NO INFERENCE.
Nothing contained in this Act or the amendments
made by this Act shall be construed to create any infer-
ence with respect to the determination of who is an em-
ployee or employer for purposes of any other provision of
law except those provisions specified in this Act or the
amendments made by this Act.
SEC. 3. INCOME TAX WITHHOLDING.
Paragraph (1) of section 3401(d) of the Internal Rev-
enue Code of 1986 is amended by inserting ‘‘including a
person that contractually assumes control of the payment
of wages,’’ after ‘‘wages,’’.
SEC. 4. FUTA TAX.
Paragraph (1) of section 3306(a) of the Internal Rev-
enue Code of 1986 is amended by striking ‘‘or’’ at the
end of subparagraph (A), by striking the period at the
end of subparagraph (B) and inserting ‘‘, or’’, and by add-
ing at the end the following new subparagraph:
‘‘(C) contractually assumes control of pay-
ment 
of 
wages 
for 
purposes 
of 
section
3401(d)(1).’’.
SEC. 5. FICA TAX.
Subsection (d) of section 3121 of the Internal Rev-
enue Code of 1986 is amended by striking ‘‘or’’ at the
end of paragraph (3), by striking the period at the end
of paragraph (4) and inserting ‘‘; or’’, and by adding at
the end the following new paragraph:
‘‘(5) any individual who is a leased employee of
an employee leasing organization.’’.
SEC. 6. EMPLOYEE LEASING ORGANIZATION’S ABILITY TO
SPONSOR WELFARE AND PENSION BENEFIT
PLANS.
Paragraph (20) of section 7701(a) of the Internal
Revenue Code of 1986 is amended—
(1) by striking the heading and inserting the
following:
‘‘(20) EMPLOYEE.—
‘‘(A) FULL-TIME
LIFE
INSURANCE
SALES-
MAN.—’’, and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B) INDIVIDUAL
COVERED
BY
AN
EM-
PLOYEE LEASING AGREEMENT.—For the pur-
pose of applying the provisions of section 79
with respect to group-term insurance purchased
for employees, for the purpose of applying the
provisions of sections 104, 105, and 106 with
respect to accident and health insurance or ac-
cident and health plans, for the purpose of ap-
plying the provisions of this title with respect to
contributions to or under a trust which is a
part of a plan described in section 401(a)
(other than a defined benefit plan), or to or
under a plan described in section 403(a) (other
than a defined benefit plan), including for this
purpose elective contributions under section
401(k) and employee contributions and match-
ing contributions under section 410(m), with
respect to a tax-exempt status of a trust form-
ing a part of such plan, and with respect to dis-
tributions under such a plan, or by a trust
forming part of such a plan, for the purpose of
applying the provisions of section 125 with re-
spect to cafeteria plans, for the purpose of ap-
plying section 127 with respect to educational
assistance programs, for the purpose of apply-
ing section 129 with respect to dependent care
assistance programs, for the purpose of apply-
ing the provisions of section 414(n), and for the
purpose of applying the provisions listed in sec-
tion 414(n)(3), for the purpose of applying the
provisions of section 106(b) with respect to con-
tributions to medical savings accounts, with re-
spect to such other benefits, plans, or programs
as are described in section 414(n)(3), an em-
ployee leasing organization may sponsor such
plans, benefits, or programs on behalf of and
for the benefit of any ‘leased employee’ per-
forming services for a ‘recipient’.’’
SEC. 7. EFFECTIVE DATE.
The amendments made by this Act shall apply to re-
muneration paid after the date of the enactment of this
Act.
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