I
106TH CONGRESS
2D SESSION
H. R. 4962
To amend title I of the Employee Retirement Income Security Act of 1974
to ensure that employees are not improperly disqualified from benefits
under pension plans and welfare plans based on a miscategorization
of their employee status.
IN THE HOUSE OF REPRESENTATIVES
JULY 26, 2000
Mr. ANDREWS introduced the following bill; which was referred to the
Committee on Education and the Workforce
A BILL
To amend title I of the Employee Retirement Income Secu-
rity Act of 1974 to ensure that employees are not im-
properly disqualified from benefits under pension plans
and welfare plans based on a miscategorization of their
employee status.
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 Benefits Eli-
gibility Fairness Act of 2000’’.
SEC. 2. FINDINGS AND PURPOSE.
(a) FINDINGS.—Congress makes the following find-
ings:
(1) The intent of the Employee Retirement In-
come Security Act of 1974 to protect the pension
and welfare benefits of workers is frustrated by the
practice of mislabeling employees to improperly ex-
clude them from employee benefit plans. Employees
are wrongly denied benefits when they are mis-
labeled as temporary employees, part-time employ-
ees, leased employees, agency employees, staffing
firm employees, and contractors. If their true em-
ployment status were recognized, mislabeled employ-
ees would be eligible to participate in employee ben-
efit plans because such plans are offered to other
employees performing the same or substantially the
same work and working for the same employer.
(2) Mislabeled employees are often paid through
staffing, temporary, employee leasing, or other simi-
lar firms to give the appearance that the employees
do not work for their worksite employer. Employ-
ment contracts and reports to government agencies
also are used to give the erroneous impression that
mislabeled employees work for staffing, temporary,
employee leasing, or other similar firms, when the
facts of the work arrangement do not meet the com-
mon law standard for determining the employment
relationship. Employees are also mislabeled as con-
tractors and paid from non-payroll accounts to give
the appearance that they are not employees of their
worksite employer. These practices violate the Em-
ployee Retirement Income Security Act of 1974.
(3) Employers are amending their benefit plans
to add provisions that exclude mislabeled employees
from participation in the plan even in the event that
such employees are determined to be common law
employees and otherwise eligible to participate in the
plan. These plan provisions violate the Employee Re-
tirement Income Security Act of 1974.
(4) As a condition of employment or continued
employment, mislabeled employees are often required
to sign documents that purport to waive their right
to participate in employee benefit plans. Such docu-
ments inaccurately claim to limit the authority of
the courts and applicable Federal agencies to correct
the mislabeling of employees and to enforce the
terms of plans providing for their participation. This
practice violates the Employee Retirement Income
Security Act of 1974.
(b) PURPOSE.—The purpose of this Act is to clarify
applicable provisions of the Employee Retirement Income
Security Act of 1974 to ensure that employees are not im-
properly excluded from participation in employee benefit
plans as a result of mislabeling of their employment sta-
tus.
SEC. 3. ADDITIONAL STANDARDS RELATING TO MINIMUM
PARTICIPATION REQUIREMENTS.
(a) REQUIRED INCLUSION
OF SERVICE.—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) For purposes of this section, in determining
‘years of service’ and ‘hours of service’, service shall in-
clude all service for the employer as an employee under
the common law, irrespective of whether the worker—
‘‘(i) is paid through a staffing firm, temporary
help firm, payroll agency, employment agency, or
other such similar arrangement,
‘‘(ii) is paid directly by the employer under an
arrangement purporting to characterize an employee
under the common law as other than an employee,
or
‘‘(iii) is paid from an account not designated as
a payroll account.’’
(b) EXCLUSION PRECLUDED WHEN RELATED TO
CERTAIN PURPORTED CATEGORIZATIONS.—Section 202
of such Act (29 U.S.C. 1052) is amended further by add-
ing at the end the following new subsection:
‘‘(c)(1) Subject to paragraph (2), a pension plan shall
be treated as failing to meet the requirements of this sec-
tion if any individual who—
‘‘(A) is an employee under the common law,
and
‘‘(B) performs the same work (or substantially
the same work) for the employer as other employees
who generally are not excluded from participation in
the plan,
is excluded from participation in the plan, irrespective of
the placement of such employee in any category of workers
(such as temporary employees, part-time employees, leased
employees, agency employees, staffing firm employees,
contractors, or any similar category) which may be speci-
fied under the plan as ineligible for participation.
‘‘(2) Nothing in paragraph (1) shall be construed to
preclude the exclusion from participation in a pension plan
of individuals who in fact do not meet a minimum service
period or minimum age which is required under the terms
of the plan and which is otherwise in conformity with the
requirements of this section.’’
(2) by striking the semicolon at the end of
clause (ii) and inserting ‘‘, or’’, and
(3) by adding at the end the following: ‘‘(iii) to
provide 
relief 
to 
employees 
who 
have 
been
miscategorized in violation of sections 202 and
402;’’.
SEC. 7. EFFECTIVE DATE.
The amendments made by this Act shall apply with
respect to plan years beginning on or after the date of
the enactment of this Act.
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