Employee Benefits Eligibility Act of 2000

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Employee Benefits Eligibility 
Fairness Act of 2000''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress makes the following findings:
            (1) The intent of the Employee Retirement Income Security 
        Act of 1974 to protect the pension and welfare benefits of 
        workers is frustrated by the practice of mislabeling employees 
        to improperly exclude them from employee benefit plans. 
        Employees are wrongly denied benefits when they are mislabeled 
        as temporary employees, part-time employees, leased employees, 
        agency employees, staffing firm employees, and contractors. If 
        their true employment status were recognized, mislabeled 
        employees would be eligible to participate in employee benefit 
        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 similar firms to give the 
        appearance that the employees do not work for their worksite 
        employer. Employment 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 common law standard for determining 
        the employment relationship. Employees are also mislabeled as 
        contractors and paid from non-payroll accounts to give the 
        appearance that they are not employees of their worksite 
        employer. These practices violate the Employee 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 Retirement 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 documents 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 improperly excluded from participation in 
employee benefit plans as a result of mislabeling of their employment 
status.

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 include 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 adding 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 section 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 specified 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.''

SEC. 4. WAIVERS OF PARTICIPATION INEFFECTIVE IF RELATED TO 
              MISCATEGORIZATION OF EMPLOYEE.

    Section 202 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1052) (as amended by section 3) is amended further by adding 
at the end the following new subsection:
    ``(d) Any waiver or purported waiver by an employee of 
participation in a pension plan or welfare plan shall be ineffective if 
related, in whole or in part, to the miscategorization of the employee 
in 1 or more ineligible plan categories.''

SEC. 5. OBJECTIVE ELIGIBILITY CRITERIA IN PLAN INSTRUMENTS.

    Section 402 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1102) is amended by adding at the end the following new 
subsection:
    ``(c)(1) The written instrument pursuant to which an employee 
benefit plan is maintained shall set forth eligibility criteria which--
            ``(A) include and exclude employees on a uniform basis;
            ``(B) are based on reasonable job classifications; and
            ``(C) are based on objective criteria stated in the 
        instrument itself for the inclusion or exclusion (other than 
        the mere listing of an employee as included or excluded).
    ``(2) No plan instrument may permit an employer or plan sponsor to 
exclude an employee under the common law from participation 
irrespective of the placement of such employee in any category of 
workers (such as temporary employees, leased employees, agency 
employees, staffing firm employees, contractors, or any similar 
category) if the employee--
            ``(A) is an employee of the employer under the common law,
            ``(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, and
            ``(C) meets a minimum service period or minimum age which 
        is required under the terms of the plan.''

SEC. 6. ENFORCEMENT.

    Section 502(a)(3)(B) of the Employee Retirement Income Security Act 
of 1974 (29 U.S.C. 1132(a)(3)(B)) is amended--
            (1) by striking ``or'' in clause (i) and inserting a comma,
            (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.

Summary: Sets forth additional standards relating to minimum requirements for such plan participation. Prohibits employers from excluding from plans such individuals who work full-time, on an indefinite long-term basis, by miscategorizing them as temporary workers. Prohibits any such exclusion based on certain purported categorizations. Makes waivers of plan participation ineffective if related to such miscategorization of employees. Requires objective eligibility criteria in plan instruments. Sets forth enforcement procedures to provide relief to employees who have been miscategorized in violation of this Act.