1313 
which may include a reduction in, or disqualification 
from receiving (or administering), subsequent grants 
under this section. 
‘‘(3) PENALTIES
ON
ADMINISTERING
ENTI-
TIES.—In the case of a third-party entity admin-
istering a paid family and medical leave benefit pro-
gram of an employer, such entity shall notify such 
employer in any case in which a penalty is imposed 
under this subsection on the administering entity 
not later than 30 days after the date on which such 
penalty has been imposed. In any case in which the 
Secretary determines that a pattern of misconduct 
exists with respect to an entity administering bene-
fits under this section for multiple employers, the 
Secretary may disqualify such entity from admin-
istering employer-sponsored programs receiving sub-
sequent grants under this section. 
‘‘(4) EMPLOYER
AND
ADMINISTRATOR
AP-
PEALS.—An employer (or administering entity) with 
respect to which a penalty is imposed under this 
subsection may appeal such decision to the Secretary 
only if such appeal is filed with the Secretary not 
later than 60 days after the date of such decision. 
‘‘(g) GREATER BENEFITS PERMITTED.—Nothing in 
this section shall be construed to prohibit an eligible em-
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ployer from providing paid family and medical leave bene-
fits that exceed the requirements described in this section. 
‘‘SEC. 2211. FUNDING FOR SMALL BUSINESS ASSISTANCE. 
‘‘(a) IN GENERAL.—There are appropriated, out of 
any funds in the Treasury not otherwise appropriated, 
such sums as may be necessary for grants in accordance 
with this section. 
‘‘(b) SMALL BUSINESS ASSISTANCE GRANTS.—The 
Secretary shall make a grant to each eligible employer (as 
defined in subsection (g)) who employs a covered indi-
vidual (as so defined) if such eligible employer satisfies 
the requirements of subsection (c). 
‘‘(c) GRANT REQUIREMENTS.—An eligible employer 
seeking a grant under this section with respect to a cov-
ered individual described in subsection (b) shall— 
‘‘(1) not later than 90 days after such indi-
vidual returns from qualified leave (as defined in 
subsection (g)) from the employer, submit an appli-
cation to the Secretary in such manner as the Sec-
retary shall provide; 
‘‘(2) attest to the Secretary that the employer 
reasonably expects to, during the period in which 
such individual is taking such qualified leave, incur 
costs attributable to replacing the labor of such indi-
vidual during such period in excess of the wages that 
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would be paid to the individual during such period 
if such leave were not taken; 
‘‘(3) agree that, on return from such qualified 
leave, the individual will— 
‘‘(A) be restored by the employer to the 
position of employment held by the individual 
when the leave commenced; or 
‘‘(B) be restored to an equivalent position 
with equivalent employment benefits, pay, and 
other terms and conditions of employment; 
‘‘(4) agree to maintain coverage for the indi-
vidual under any ‘group health plan’ (as defined in 
section 2212) for the duration of such qualified leave 
at the level and under the conditions coverage would 
have been provided if the individual had continued in 
employment continuously for the duration of such 
leave; 
‘‘(5) upon the award of such grant, notify the 
individual of their rights under paragraphs (3) and 
(4). 
‘‘(d) AMOUNT OF GRANT.—The amount of a grant 
to an eligible employer with respect to a covered individual 
shall be an amount equal to the product of 2.5 multiplied 
by the average weekly wage of the State in which the indi-
vidual’s worksite is located for the most recent calendar 
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year. For purposes of this subsection, the average weekly 
wage of a State for a calendar year shall be determined 
and annually published by the Secretary on the basis of 
data prepared by the Bureau of Labor Statistics that is 
based on a quarterly census of employers in the State of 
wages paid for unemployment insurance-covered employ-
ment. 
‘‘(e) LIMITATIONS.—In no case may an eligible em-
ployer— 
‘‘(1) receive more than 1 grant under this sec-
tion with respect to the same covered individual in 
a single calendar year; or 
‘‘(2) receive more than 10 total grants under 
this section in a single calendar year. 
‘‘(f) ENFORCEMENT.—In any case in which— 
‘‘(1) an employer’s attestation with respect to 
costs incurred made pursuant to subsection (c)(2) is 
not made in good faith; or 
‘‘(2) an employer who receives a grant under 
this section with respect to a covered individual fails 
to satisfy the requirements of paragraph (3) or (4) 
of subsection (c) with respect to such individual, 
the Secretary may require the employer to repay the full 
amount of such grant (including any applicable interest) 
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and may permanently prohibit the employer from applying 
for any subsequent grants under this section. 
‘‘(g) DEFINITIONS.—For purposes of this section— 
‘‘(1) COVERED INDIVIDUAL.—For purposes of 
this section, the term ‘covered individual’ means an 
individual employed by an eligible employer who 
takes 4 or more weeks of leave from such employer, 
or anticipates taking 4 or more weeks, during the in-
dividual’s benefit period for which the individual re-
ceives paid family and medical leave benefits— 
‘‘(A) under section 2202(a); 
‘‘(B) under the law of a legacy State (as 
defined in section 2209(b)); or 
‘‘(C) under an eligible employer-sponsored 
plan under section 2210, 
but only if the eligible employer has received no 
other State or Federal grant intended to cover the 
costs described in subsection (c)(2) with respect to 
such individual. 
‘‘(2) ELIGIBLE EMPLOYER.—The term ‘eligible 
employer’ means any person (other than a govern-
mental agency) who regularly employs at least 1 and 
not more than 50 employees. 
‘‘(3) QUALIFIED LEAVE.—The term ‘qualified 
leave’ means leave taken by an individual with re-
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spect to which the individual is eligible for paid fam-
ily and medical leave benefits under section 2202, 
under the law of a legacy State (as defined in sec-
tion 2209(b)), or under an eligible employer-spon-
sored plan under section 2210. 
‘‘SEC. 2212. DEFINITIONS. 
‘‘For purposes of this title the following definitions 
apply: 
‘‘(1) GROUP HEALTH PLAN.—The term ‘group 
health plan’ has the meaning given such term in sec-
tion 5000(b)(1) of the Internal Revenue Code of 
1986. 
‘‘(2) NATIONAL AVERAGE WAGE INDEX.—The 
term ‘national average wage index’ has the meaning 
given such term in section 209(k)(1). 
‘‘(3) SECRETARY.—The term ‘Secretary’ means 
the Secretary of the Treasury. 
‘‘(4) SELF-EMPLOYMENT
INCOME.—The term 
‘self-employment income’ has the meaning given the 
term in section 1402(b) of the Internal Revenue 
Code of 1986 for purposes of the taxes imposed by 
section 1401(b) of such Code. For purposes of sec-
tion 2202(a) and 2203(b)(3), the Secretary shall de-
termine rules for the crediting of self-employment 
income to calendar quarters, under which— 
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‘‘(A) in the case of a taxable year which is 
a calendar year, self-employment income shall 
be credited equally to each quarter of such cal-
endar year; and 
‘‘(B) in the case of any other taxable year, 
such income shall be credited equally to the cal-
endar quarter in which such taxable year ends 
and to each of the next three or fewer preceding 
quarters any part of which is in such taxable 
year. 
‘‘(5) STATE.—The term ‘State’ means any 
State of the United States or the District of Colum-
bia or any territory or possession of the United 
States. 
‘‘(6) WAGES.—The term ‘wages’ has the mean-
ing given such term in section 3121(a) of the Inter-
nal Revenue Code of 1986 for purposes of the taxes 
imposed by sections 3101(b) and 3111(b) of such 
Code, except that such term also includes— 
‘‘(A) compensation, as defined in section 
3231(e) of such Code for purposes of the Rail-
road Retirement Tax Act; and 
‘‘(B) unemployment compensation, as de-
fined in section 85(b) of such Code. 
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‘‘(7) WEEK.—The term ‘week’ means a 7-day 
period beginning on a Sunday.’’. 
SEC. 130002. ACCESS TO WAGE INFORMATION FROM THE 
NATIONAL DIRECTORY OF NEW HIRES FOR 
THE 
PURPOSE 
OF 
ADMINISTERING 
PAID 
LEAVE. 
(a) IN GENERAL.—Section 453(j) of the Social Secu-
rity Act (42 U.S.C. 653(j)) is amended— 
(1) by redesignating paragraphs (5) through 
(11) as paragraphs (6) through (12), respectively; 
and 
(2) by adding after paragraph (4) the following: 
‘‘(5) PROVISION OF NEW HIRE INFORMATION 
FOR
PURPOSES
OF
FAMILY
AND
MEDICAL
LEAVE 
PROGRAM.— 
‘‘(A) IN GENERAL.—The National Direc-
tory of New Hires shall provide the Secretary 
of the Treasury with all information in the Na-
tional Directory relating to wages paid to indi-
viduals. 
‘‘(B) USE AND MAINTENANCE OF INFOR-
MATION BY THE SECRETARY OF THE TREAS-
URY.—The Secretary of the Treasury may use 
information provided under this paragraph only 
for purposes of administering the paid family 
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and medical leave benefit program under title 
XXII, and shall maintain such information in 
the records of the Secretary of the Treasury for 
such time as the Secretary of the Treasury 
deems necessary for the administration of such 
program.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
453(i)(2)(C) of such Act (42 U.S.C. 653(i)(2)(C)) is 
amended by striking ‘‘(j)(5)’’ and inserting ‘‘(j)(6)’’. 
Subtitle B—Retirement 
SEC. 131001. AMENDMENT OF 1986 CODE. 
Except as otherwise expressly provided, whenever in 
this subtitle an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a 
section or other provision of the Internal Revenue Code 
of 1986. 
PART 1—AUTOMATIC CONTRIBUTION PLANS AND 
ARRANGEMENTS 
SEC. 131101. TAX IMPOSED ON EMPLOYERS FAILING TO 
MAINTAIN OR FACILITATE AUTOMATIC CON-
TRIBUTION PLAN OR ARRANGEMENT. 
(a) AUTOMATIC CONTRIBUTION PLAN OR ARRANGE-
MENT.— 
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(1) IN GENERAL.—Section 414 is amended by 
adding at the end the following: 
‘‘(aa) AUTOMATIC CONTRIBUTION PLAN
OR AR-
RANGEMENT.—For purposes of this title— 
‘‘(1) IN GENERAL.—The term ‘automatic con-
tribution plan or arrangement’ means— 
‘‘(A) a defined contribution plan that— 
‘‘(i) is described in clause (i), (ii), or 
(iv) of section 219(g)(5)(A), 
‘‘(ii) includes a qualified cash or de-
ferred arrangement or a salary reduction 
arrangement, and 
‘‘(iii) meets the notice, eligibility, con-
tribution, investment, fee, and lifetime in-
come requirements of paragraphs (2), (3), 
(4), (5), (6), and (7), respectively, 
‘‘(B) an automatic IRA arrangement de-
scribed in paragraph (8), 
‘‘(C) an arrangement described in section 
408(p) that meets the notice, contribution, in-
vestment, and fee requirements described in 
paragraphs (2), (4), (5), and (6), and 
‘‘(D) a plan described in clause (i), (ii), 
(iv), (v), or (vi) of section 219(g)(5)(A) that is 
established and maintained by an employer as 
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of the date of enactment of the Act to provide 
for reconciliation pursuant to title II of S. Con. 
Res. 14, or a plan described in section 
219(g)(5)(A)(iv) that is not subject to title I of 
the Employee Retirement Income Security Act 
of 1974 and offers annuity contracts, or makes 
custodial accounts available to employees, as of 
such date. 
‘‘(2) NOTICE REQUIREMENTS.—A plan or ar-
rangement shall be treated as meeting the notice re-
quirements of this paragraph with respect to an em-
ployee if the plan or arrangement meets the notice 
requirements of, or similar to, the notice require-
ments of section 401(k)(13)(E), excluding any such 
notice requirements that are not applicable or rel-
evant to the such plan or arrangement. 
‘‘(3) ELIGIBILITY REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The requirements of 
this paragraph shall be treated as met if all em-
ployees of the employer are eligible to partici-
pate in an automatic contribution plan or ar-
rangement maintained or facilitated by the em-
ployer. 
‘‘(B) CERTAIN
EXCLUSIONS.—The fol-
lowing employees may be excluded from consid-
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eration in determining whether the require-
ments of this paragraph are met: 
‘‘(i) INDIVIDUALS
LESS
THAN
YEARS OLD.—Any employee who has not 
attained age 21. 
‘‘(ii) CERTAIN OTHER EMPLOYEES.— 
Any 
employee 
described 
in 
section 
410(b)(3). 
‘‘(iii) SERVICE REQUIREMENTS.—Any 
employee who has not completed at least 
one of the following periods of service with 
the employer maintaining or facilitating 
the plan or arrangement: 
‘‘(I) The period permitted under 
section 410(a)(1) (determined without 
regard to subparagraph (B)(i) there-
of). 
‘‘(II) A period of 2 consecutive 
12-month periods during each of 
which the employee has at least 500 
hours of service. 
‘‘(C) SPECIAL
RULES
FOR
CONTROLLED 
GROUPS.—Eligible employees within an em-
ployer need not be eligible to participate in the 
same automatic contribution plan or arrange-
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ment. For purposes of this subsection, the term 
‘employer’ shall include all employers treated as 
a single employer under subsection (b), (c), 
(m), or (o) of section 414. 
‘‘(D) ENTRY DATES.—Rules similar to the 
rules of section 410(a)(4) shall apply with re-
spect to employees who have satisfied the age 
and service requirements referenced in subpara-
graph (B) and who are otherwise entitled to 
participate in a plan or arrangement. 
‘‘(4) CONTRIBUTION REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The requirements of 
this paragraph shall be treated as met if, under 
the plan or arrangement, each employee eligible 
to participate in the plan or arrangement is 
treated as having elected to have the employer 
make elective contributions in an amount equal 
to the qualified percentage of compensation. 
‘‘(B) ELECTION OUT.—The election treat-
ed as having been made under subparagraph 
(A) shall cease to apply with respect to any em-
ployee if such employee makes an affirmative 
election— 
‘‘(i) not to have such contributions 
made, or 
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‘‘(ii) to make elective contributions at 
a level specified in such affirmative elec-
tion. 
‘‘(C) QUALIFIED PERCENTAGE.—For pur-
poses of this paragraph, and except as provided 
in subparagraph (D)(i), the term ‘qualified per-
centage’ means, with respect to any employee, 
any percentage determined under the plan or 
arrangement if such percentage is applied uni-
formly, does not exceed 15 percent (10 percent 
during the period described in clause (i)), and 
is at least— 
‘‘(i) 6 percent during the period end-
ing on the last day of the first plan year 
which begins after the date on which the 
first elective contribution described in sub-
paragraph (A) is made with respect to 
such employee, 
‘‘(ii) 7 percent during the first plan 
year following the plan year described in 
clause (i), 
‘‘(iii) 8 percent during the first plan 
year following the plan year described in 
clause (ii), 
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‘‘(iv) 9 percent during the first plan 
year following the plan year described in 
clause (iii), and 
‘‘(v) 10 percent during any subse-
quent plan year. 
‘‘(D) RULES
RELATING
TO
AUTOMATIC 
IRA ARRANGEMENTS.—For purposes of this 
paragraph— 
‘‘(i) 
QUALIFIED
PERCENTAGE.—In 
the case of an automatic IRA arrange-
ment, the term ‘qualified percentage’ 
means, with respect to an employee for any 
plan year, a percentage equal to the min-
imum percentage described for such plan 
year under subparagraph (C). 
‘‘(ii) PAYROLL DEDUCTION CONTRIBU-
TIONS.—In the case of an automatic IRA 
arrangement, any reference in this para-
graph to elective contributions shall be 
treated as including a reference to payroll 
deduction contributions. 
‘‘(5) INVESTMENT REQUIREMENTS.— 
‘‘(A) IN GENERAL.— 
‘‘(i) DEFAULT INVESTMENTS.—A plan 
or arrangement shall be treated as meeting 
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the requirements of this paragraph if in 
the absence of an investment election by a 
participant or beneficiary, amounts are in-
vested only in the class of assets or funds 
described in subparagraph (B). 
‘‘(ii) REQUIRED
INVESTMENT
OP-
TIONS
IN
AUTOMATIC
IRA
ARRANGE-
MENT.—In addition to the default invest-
ment requirement of clause (i), an auto-
matic IRA arrangement shall be treated as 
meeting the requirements of this para-
graph if the arrangement also allows the 
participant to invest in any of the class of 
assets or funds described in subparagraph 
(B), (C), (D), or (E), and provides for no 
other investment options. 
‘‘(B) TARGET DATE/LIFECYCLE OPTION.— 
The class of assets or funds described in this 
clause is the class of assets or funds that con-
stitutes a qualified default investment alter-
native under Department of Labor regulation 
section 2550.404c–5(e)(4)(i). 
‘‘(C) 
PRINCIPAL
PRESERVATION.—The 
class of assets or funds described in this clause 
is the class of assets or funds that is designed 
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to protect the principal of the individual on an 
ongoing basis. 
‘‘(D) BALANCED
OPTION.—The class of 
assets or funds described in this clause is the 
class of assets or funds that constitutes a quali-
fied default investment alternative under De-
partment 
of 
Labor 
regulation 
section 
2550.404c–5(e)(4)(ii). 
‘‘(E) OTHER.—Any other class of assets or 
funds determined by the Secretary to be a 
qualified investment for purposes of this sec-
tion. 
‘‘(6) FEE REQUIREMENTS.—In the case of any 
plan or arrangement not otherwise subject to title I 
of the Employee Retirement Income Security Act of 
1974, under the fee requirements of this paragraph, 
no participant may be charged unreasonable fees or 
expenses. 
‘‘(7) LIFETIME INCOME REQUIREMENTS.— 
‘‘(A) IN
GENERAL.—A plan or arrange-
ment shall be treated as meeting the lifetime in-
come requirement described in this paragraph if 
the plan or arrangement permits participants to 
elect to receive at least 50 percent of their vest-
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ed account balance in a form of distribution de-
scribed in section 401(a)(38)(B)(iii). 
‘‘(B) EXCEPTION.— 
‘‘(i) IN
GENERAL.—This paragraph 
shall not apply with respect to any partici-
pant whose vested account balance is 
$200,000 or less at the time of distribu-
tion. 
‘‘(ii) NOT TREATED AS DISCRIMINA-
TORY IN FAVOR OF HIGHLY COMPENSATED 
EMPLOYEES.—A plan shall not be treated 
as failing to meet the requirements of sec-
tion 401(a)(4) solely by reason of applying 
the exception of clause (i) to the require-
ments of subparagraph (A). 
‘‘(8) AUTOMATIC IRA ARRANGEMENT.— 
‘‘(A) IN GENERAL.—For purposes of this 
paragraph, the term ‘automatic IRA arrange-
ment’ means, with respect to an employer (and 
trustee or issuer designated by the employer), 
an arrangement facilitated by the employer 
which meets the requirements of this paragraph 
and the eligibility, contribution, investment, and 
fee requirements of paragraphs (3), (4), (5), 
and (6), and under which an employee— 
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