I 
116TH CONGRESS 
1ST SESSION H. R. 1874 
To amend the Internal Revenue Code of 1986 to require that qualified 
cash or deferred arrangements allow certain long-term employees to par-
ticipate. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 26, 2019 
Mrs. MURPHY introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to require 
that qualified cash or deferred arrangements allow cer-
tain long-term employees to participate. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. QUALIFIED CASH OR DEFERRED ARRANGE-
MENTS MUST ALLOW LONG-TERM EMPLOY-
EES WORKING MORE THAN 500 BUT LESS 
THAN 1,000 HOURS PER YEAR TO PARTICI-
PATE. 
(a) PARTICIPATION REQUIREMENT.— 
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(1) IN GENERAL.—Section 401(k)(2)(D) of the 
Internal Revenue Code of 1986 is amended to read 
as follows: 
‘‘(D) which does not require, as a condi-
tion of participation in the arrangement, that 
an employee complete a period of service with 
the employer (or employers) maintaining the 
plan extending beyond the close of the earlier 
of— 
‘‘(i) the period permitted under sec-
tion 410(a)(1) (determined without regard 
to subparagraph (B)(i) thereof), or 
‘‘(ii) subject to the provisions of para-
graph (15), the first period of 3 consecu-
tive 12-month periods during each of which 
the employee has at least 500 hours of 
service.’’. 
(2) SPECIAL RULES.—Section 401(k) of such 
Code is amended by adding at the end the following 
new paragraph: 
‘‘(15) SPECIAL RULES FOR PARTICIPATION RE-
QUIREMENT
FOR
LONG-TERM, PART-TIME
WORK-
ERS.—For purposes of paragraph (2)(D)(ii)— 
‘‘(A) AGE REQUIREMENT MUST BE MET.— 
Paragraph (2)(D)(ii) shall not apply to an em-
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who are eligible to participate in a plan 
maintained by the employer solely by rea-
son of paragraph (2)(D)(ii) from the appli-
cation of the vesting and benefit require-
ments under subsections (b) and (c) of sec-
tion 416. 
‘‘(iii) VESTING.—For purposes of de-
termining whether an employee described 
in clause (i) has a nonforfeitable right to 
employer contributions (other than con-
tributions 
described 
in 
paragraph 
(3)(D)(i)) under the arrangement, each 
12-month period for which the employee 
has at least 500 hours of service shall be 
treated as a year of service. 
‘‘(iv) 
EMPLOYEES
WHO
BECOME 
FULL-TIME
EMPLOYEES.—This subpara-
graph shall cease to apply to any employee 
as of the first plan year beginning after 
the plan year in which the employee meets 
the 
requirements 
of 
section 
410(a)(1)(A)(ii) without regard to para-
graph (2)(D)(ii). 
‘‘(C) EXCEPTION FOR EMPLOYEES UNDER 
COLLECTIVELY BARGAINED PLANS, ETC.—Para-
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graph (2)(D)(ii) shall not apply to employees 
described in section 410(b)(3). 
‘‘(D) SPECIAL RULES.— 
‘‘(i) TIME
OF
PARTICIPATION.—The 
rules of section 410(a)(4) shall apply to an 
employee eligible to participate in an ar-
rangement solely by reason of paragraph 
(2)(D)(ii). 
‘‘(ii) 12-MONTH PERIODS.—12-month 
periods shall be determined in the same 
manner as under the last sentence of sec-
tion 410(a)(3)(A).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2020, except that, for purposes of section 
401(k)(2)(D)(ii) of the Internal Revenue Code of 1986 (as 
added by such amendments), 12-month periods beginning 
before January 1, 2021, shall not be taken into account. 
Æ 
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