I
105TH CONGRESS
1ST SESSION
H. R. 769
To amend the Federal Property and Administrative Services Act of 1949
to ensure proper classification as employees and independent contractors
of persons awarded Federal procurement contracts.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 13, 1997
Mr. LANTOS (for himself and Mr. SHAYS) introduced the following bill; which
was referred to the Committee on Government Reform and Oversight
A BILL
To amend the Federal Property and Administrative Services
Act of 1949 to ensure proper classification as employees
and independent contractors of persons awarded Federal
procurement contracts.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. CLASSIFICATION OF PERSONS AS EMPLOYEES
AND INDEPENDENT CONTRACTORS UNDER
CERTAIN PROCUREMENT CONTRACTS.
(a) IN GENERAL.—Title III of the Federal Property
and Administrative Services Act of 1949 (41 U.S.C. 251
et seq.) is amended by adding at the end the following
new section:
‘‘SEC. 317. CLASSIFICATION OF PERSONS AS EMPLOYEES
AND INDEPENDENT CONTRACTORS.
‘‘(a) INELIGIBILITY FOR GOVERNMENT CONTRACTS
AND SUBCONTRACTS.—
‘‘(1) IN
GENERAL.—A person (including any
subsidiary, successor, or related entity of a person)
shall not be eligible for any Government contract
during the 2-year period beginning on the date of
the issuance of any final determination under Fed-
eral law that the person (including any subsidiary or
related entity of the person) willfully misclassified an
individual for purposes of any employment tax.
‘‘(2) FINAL DETERMINATION.—For purposes of
this subsection, a determination is final if all rights
to appeal the determination, or to request a review,
rehearing, or redetermination of the matter that is
the subject of the determination, have been ex-
hausted or have lapsed.
‘‘(b) CERTIFICATION OF ADEQUACY OF BIDS TO PAY
EMPLOYMENT TAXES.—A person who submits a bid or
proposal for a Government contract shall certify that the
amount of the bid or proposal is adequate to pay all em-
ployment taxes with respect to all work to be performed
under the contract by employees of the person.
‘‘(c) NOTIFICATION
OF INDEPENDENT CONTRAC-
TORS.—Each Government contract shall include a require-
ment that the contractor shall provide, to each person who
performs work under the contract and who is treated by
the contractor as an independent contractor for purposes
of employment taxes, a notification regarding—
‘‘(1) all obligations of the independent contrac-
tor under Federal and State law to withhold and pay
employment taxes with respect to work performed
under the contract by the independent contractor
(including work performed by employees of the inde-
pendent contractor); and
‘‘(2) all statutory rights and protections that
are available under Federal and State law to em-
ployees of the contractor and are not available to the
independent contractor (including employees of the
independent contractor), including protections and
benefits under Federal laws relating to fair labor
standards, occupational health and safety, civil
rights, unemployment insurance, and worker’s com-
pensation.
‘‘(d) RIGHT OF ACTION.—A person who submits a
bid or proposal for a Government contract and who suffers
damages as a result of the award of the contract to a per-
son who knowingly and willfully submits a certification
under subsection (b) with respect to the contract that is
false, may bring an action for damages against the person
awarded the contract in any district court of the United
States in which the defendant is located.
‘‘(e) DEFINITIONS.—For purposes of this section:
‘‘(1) EMPLOYMENT
TAX.—The term ‘employ-
ment tax’ means any tax imposed by subtitle C of
the Internal Revenue Code of 1986.
‘‘(2) 
GOVERNMENT
CONTRACT.—The 
term
‘Government contract’ means a contract awarded by
an executive agency, and all subcontracts under such
a contract.
‘‘(3) MISCLASSIFY.—The term ‘misclassify’
means to treat as an independent contractor an indi-
vidual who is an employee.’’.
(b) CLERICAL AMENDMENT.—The Federal Property
and Administrative Services Act of 1949 is amended in
the table of contents in section 1 by adding at the end
of the portion of the table relating to title III the following
new item:
‘‘Sec. 317. Classification of persons as employees and independent contractors.’’.
SEC. 2. APPLICABILITY.
Section 317 of the Federal Property and Administra-
tive Services Act of 1949, as added by section 1, shall
apply to—
(1) Government contracts entered into after the
expiration of the 180-day period beginning on the
date of the enactment of this Act;
(2) subcontracts under contracts covered by
paragraph (1); and
(3) options exercised under any Government
contract after the expiration of the 180-day period
beginning on the date of the enactment of this Act.
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