I 
108TH CONGRESS 
1ST SESSION H. R. 1270
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 
MARCH 13, 2003
Mr. CRANE (for himself, Mr. CAMP, Mr. ENGLISH, Mr. LEWIS of Kentucky, 
Mr. JEFFERSON, and Mr. VITTER) 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 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 2003’’. 
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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