[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2642 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2642

To amend the Internal Revenue Code of 1986 to clarify the standards for 
     determining whether an employer-employee relationship exists.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 8, 1997

Mr. Visclosky (for himself, Mr. Lipinski, Mr. Jackson of Illinois, and 
 Mr. Sanders) 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 standards for 
     determining whether an employer-employee relationship exists.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. STANDARDS FOR DETERMINING EMPLOYER-EMPLOYEE RELATIONSHIP.

    (a) In General.--Chapter 25 of the Internal Revenue Code of 1986 
(relating to general provisions relating to employment taxes) is 
amended by adding at the end the following new section:

``SEC. 3511. STANDARDS FOR DETERMINING EMPLOYER-EMPLOYEE RELATIONSHIP.

    ``An individual who performs services for any person (in this 
section referred to as the `service recipient') shall be presumed for 
purposes of this title to be an employee of such person unless all of 
the following requirements are met:
            ``(1) The individual makes comparable services available to 
        the general public on a regular and consistent basis and 
        represents himself as an independent contractor with respect to 
        such services.
            ``(2) The individual has performed, or is available to 
        perform, services for more than 1 recipient at the same time.
            ``(3) The service recipient does not have the right (and 
        does not attempt) to control the manner or means of the 
        individual's performance of such services.
            ``(4) The individual controls the means of performing the 
        services, including setting the sequence and hours of work.
            ``(5) The individual operates under contracts to perform 
        specific services for specific amounts of money, the rate of 
        which is negotiated for every service performed.
            ``(6) The individual may realize a profit or suffer a loss 
        under contracts to perform services.
            ``(7) The individual is responsible for the satisfactory 
        completion of the work that the individual contracts to perform 
        and is liable for a failure to complete the work.
            ``(8) The individual incurs significant unreimbursed 
        capital expenses (not typically incurred by employees) in 
        carrying on the business activity in which such services are 
        performed.''.
    (b) Clerical Amendment.--The table of sections for chapter 25 of 
such Code is amended by adding at the end the following new item:

                              ``Sec. 3511. Standards for determining 
                                        employer-employee 
                                        relationship.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to services performed after December 31, 1997.
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