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DEFINITION OF WAGES
SEC. 209. [42 U.S.C. 409] (a)
For the purposes of this title, the term “wages” means remuneration
paid prior to 1951 which was wages for the purposes of this title under the
law applicable to the payment of such remuneration, and remuneration paid after
1950 for employment, including the cash value of all remuneration (including
benefits) paid in any medium other than cash; except that, in the case of remuneration
paid after 1950, such term shall not include—
-
- (1)(A) That part of remuneration which,
after remuneration (other than remuneration referred to in the succeeding
subsections of this section) equal to $3,600 with respect to employment has
been paid to an individual during any calendar year prior to 1955, is paid
to such individual during such calendar year;
-
- (B) That part of remuneration which, after remuneration
(other than remuneration referred to in the succeeding subsections of this
section) equal to $4,200 with respect to employment has been paid to an individual
during any calendar year after 1954 and prior to 1959, is paid to such individual
during such calendar year;
-
- (C) That part of remuneration which, after remuneration
(other than remuneration referred to in the succeeding subsections of this
section) equal to $4,800 with respect to employment has been paid to an individual
during any calendar year after 1958 and prior to 1966, is paid to such individual
during such calendar year;
-
- (D) That part of remuneration which, after remuneration
(other than remuneration referred to in the succeeding subsections of this
section) equal to $6,600 with respect to employment has been paid to an individual
during any calendar year after 1965 and prior to 1968, is paid to such individual
during such calendar year;
-
- (E) That part of remuneration which, after remuneration
(other than remuneration referred to in the succeeding subsections of this
section) equal to $7,800 with respect to employment has been paid to an individual
during any calendar year after 1967 and prior to 1972, is paid to such individual
during such calendar year;
-
- (F) That part of remuneration which, after remuneration
(other than remuneration referred to in the succeeding subsections of this
section) equal to $9,000 with respect to employment has been paid to an individual
during any calendar year after 1971 and prior to 1973, is paid to such individual
during any such calendar year;
-
- (G) That part of remuneration which, after remuneration
(other than remuneration referred to in the succeeding subsections of this
section) equal to $10,800 with respect to employment has been paid to an individual
during any calendar year after 1972 and prior to 1974, is paid to such individual
during such calendar year;
-
- (H) That part of remuneration which, after remuneration
(other than remuneration referred to in the succeeding subsections of this
section) equal to $13,200 with respect to employment has been paid to an individual
during any calendar year after 1973 and prior to 1975, is paid to such individual
during such calendar year;
-
- (I) That part of remuneration which, after remuneration
(other than remuneration referred to in the succeeding subsections of this
section) equal to the contribution and benefit base (determined under section
230) with respect to employment has been paid to an
individual during any calendar year after 1974 with respect to which such
contribution and benefit base is effective, is paid to such individual during
such calendar year;
-
- (2) The amount of any payment (including any amount paid
by an employer for insurance or annuities, or into a fund, to provide for
any such payment) made to, or on behalf of, an employee or any of his dependents
under a plan or system established by an employer which makes provision for
his employees generally (or for his employees generally and their dependents)
or for a class or classes of his employees (or for a class or classes of his
employees and their dependents), on account of (A) sickness or accident disability
(but, in the case of payments made to an employee or any of his dependents,
this clause shall exclude from the term “wages” only payments
which are received under a workmen's compensation law), or[121]
(B) medical or hospitalization expenses in connection with sickness or accident
disability, or (C) death, except that this subsection does not apply to a
payment for group-term life insurance to the extent that such payment is includible
in the gross income of the employee under the Internal Revenue Code of 1986;
-
- (3) Any payment on account of sickness or accident disability,
or medical or hospitalization expenses in connection with sickness or accident
disability, made by an employer to, or on behalf of, an employee after the
expiration of six calendar months following the last calendar month in which
the employee worked for such employer;
-
- (4) Any payment made to, or on behalf of, an employee
or his beneficiary (A) from or to a trust exempt from tax under section 165(a)
of the Internal Revenue Code of 1939[122]
at the time of such payment or, in the case of a payment after 1954, under
sections 401 and 501(a) of the Internal Revenue Code of 1954 or the Internal
Revenue Code of 1986[123], unless
such payment is made to an employee of the trust as remuneration for services
rendered as such employee and not as a beneficiary of the trust, or (B) under
or to an annuity plan which, at the time of such payment, meets the requirements
of section 165(a)(3), (4), (5), and (6) of the Internal Revenue Code of 1939
or, in the case of a payment after 1954 and prior to 1963, the requirements
of section 401(a)(3), (4), (5), and (6)
of the Internal Revenue Code of 1954, or (C) under or to an annuity plan which,
at the time of any such payment after 1962, is a plan described in section
403(a) of the Internal Revenue Code of 1986[124],
or (D) under or to a bond purchase plan which, at the time of any such payment
after 1962, is a qualified bond purchase plan described in section 405(a)
of the Internal Revenue Code of 1954 (as in effect before the enactment of
the Tax Reform Act of 1984), or (E) under or to an annuity contract described
in section 403(b) of the Internal Revenue Code of 1986[125],
other than a payment for the purchase of such contract which is made by reason
of a salary reduction agreement (whether evidenced by a written instrument
or otherwise), or (F) under or to an exempt governmental deferred compensation
plan (as defined in section 3121(v)(3) of such Code[126]),
or (G) to supplement pension benefits under a plan or trust described in any
of the foregoing provisions of this subsection to take into account some portion
or all of the increase in the cost of living (as determined by the Secretary
of Labor) since retirement but only if such supplemental payments are under
a plan which is treated as a welfare plan under section 3(2)(B)(ii) of the
Employee Retirement Income Security Act of 1974[127]
, or (H) under a simplified employee pension (as defined in section 408(k)(1)
of such Code), other than any contributions described in section 408(k)(6)
of such Code, (I) under a cafeteria plan (within the meaning of section 125
of the Internal Revenue Code of 1986) if such payment would not be treated
as wages without regard to such plan and it is reasonable to believe that
(if section 125 applied for purposes of this section) section 125 would not
treat any wages as constructively received; or (J) under an arrangement to
which section 408(p) of such Code applies, other than any elective contributions
under paragraph (2)(A)(i) thereof; or (K) under a plan described in section
457(e)(11)(A)(ii) of the Internal Revenue Code of 1986 and maintained by an
eligible employer (as defined in section 457(e)(1) of such Code);
-
- (5) The payment by an employer (without deduction from
the remuneration of the employee)—
-
- (A) of the tax imposed upon an employee under section
3101 of the Internal Revenue Code of 1986[128],
or
-
- (B) of any payment required from an employee under
a State unemployment compensation law,
-
- with respect to remuneration paid to an employee for domestic service in
a private home of the employer or for agricultural labor;
-
- (6)(A) Remuneration paid in any medium
other than cash to an employee for service not in the course of the employer's
trade or business or for domestic service in a private home of the employer;
-
- (B) Cash remuneration paid by an employer in any calendar
year to an employee for domestic service in a private home of the employer
(including domestic service on a farm operated for profit[129]),
if the cash remuneration paid in such year by the employer to the employee
for such service is less than the applicable dollar threshold (as defined
in section 3121(x) of the Internal Revenue Code of 1986) for such year;
-
- (C) Cash remuneration paid by an employer in any calendar
year to an employee for service not in the course of the employer's trade
or business, if the cash remuneration paid in such year by the employer to
the employee for such service is less than $100. As used in this paragraph,
the term “service not in the course of the employer's trade or business”
does not include domestic service in a private home of the employer and does
not include service described in section 210(f)(5);
-
- (7)(A) Remuneration paid in any medium
other than cash for agricultural labor;
-
- (B) Cash remuneration paid by an employer in any calendar
year to an employee for agricultural labor unless—
-
- (i) the cash remuneration paid in such year by the employer to the
employee for such labor is $150 or more, or
-
- (ii) the employer's expenditures for agricultural labor in such year
equal or exceed $2,500,
-
- except that clause (ii) shall not apply in determining whether remuneration
paid to an employee constitutes “wages” under this section if
such employee (I) is employed as a hand harvest laborer and is paid on a piece
rate basis in an operation which has been, and is customarily and generally
recognized as having been, paid on a piece rate basis in the region of employment,
(II) commutes daily from his permanent residence to the farm on which he is
so employed, and (III) has been employed in agriculture less than 13 weeks
during the preceding calendar year;
-
- (8) Remuneration paid by an employer in any year to an
employee for service described in section 210(j)(3)(C)
(relating to home workers), if the cash remuneration paid in such year by
the employer to the employee for such service is less than $100;
-
- (9) Remuneration paid to or on behalf of an employee if
(and to the extent that) at the time of the payment of such remuneration it
is reasonable to believe that a corresponding deduction is allowable under
section 217 of the Internal Revenue Code of 1986 (determined without regard
to section 274(n) of such Code[130]);
-
- (10)(A) Tips paid in any medium other
than cash;
-
- (B) Cash tips received by an employee in any calendar
month in the course of his employment by an employer unless the amount of
such cash tips is $20 or more;
-
- (11) Any payment or series of payments by an employer
to an employee or any of his dependents which is paid—
-
- (A) upon or after the termination of an employee's
employment relationship because of (A) death, or (B) retirement for disability,
and
-
- (B) under a plan established by the employer which
makes provision for his employees generally or a class or classes of his
employees (or for such employees or class or classes of employees and
their dependents),
-
- other than any such payment or series of payments which would have been
paid if the employee's employment relationship had not been so terminated;
-
- (12) Any payment made by an employer to a survivor or
the estate of a former employee after the calendar year in which such employee
died;
-
- (13) Any payment made by an employer to an employee,
if at the time such payment is made such employee is entitled to disability
insurance benefits under section 223(a) and such
entitlement commenced prior to the calendar year in which such payment is
made, and if such employee did not perform any services for such employer
during the period for which such payment is made;
-
- (14)(A) Remuneration paid by an organization
exempt from income tax under section 501 of the Internal Revenue Code of 1986[131]
in any calendar year to an employee for service rendered in the employ of
such organization, if the remuneration paid in such year by the organization
to the employee for such service is less than $100;
-
- (B) Any contribution, payment, or service, provided
by an employer which may be excluded from the gross income of an employee,
his spouse, or his dependents, under the provisions of section 120 of the
Internal Revenue Code of 1986[132]
(relating to amounts received under qualified group legal services plans);
-
- (15) Any payment made, or benefit furnished, to or for
the benefit of an employee if at the time of such payment or such furnishing
it is reasonable to believe that the employee will be able to exclude such
payment or benefit from income under section 127 or 129 of the Internal Revenue
Code of 1986[133];
-
- (16) The value of any meals or lodging furnished by or
on behalf of the employer if at the time of such furnishing it is reasonable
to believe that the employee will be able to exclude such items from income
under section 119 of the Internal Revenue Code of 1986[134]
;
-
- (17) Any benefit provided to or on behalf of an employee
if at the time such benefit is provided it is reasonable to believe that the
employee will be able to exclude such benefit from income under section 74(c),
117, or 132 of the Internal Revenue Code of 1986[135];
or
-
- (18) Remuneration consisting of income excluded from
taxation under section 7873 of the Internal Revenue Code of 1986 (relating
to income derived by Indians from exercise of fishing rights).
(b) Nothing in the regulations prescribed for purposes of
chapter 24 of the Internal Revenue Code of 1986 [136]
(relating to income tax withholding) which provides an exclusion from “wages”
as used in such chapter shall be construed to require a similar exclusion from
“wages” in the regulations prescribed for purposes of this title.
(c) For purposes of this title, in the case of domestic service
described in subsection (a)(6)(B), any payment of cash remuneration for such
service which is more or less than a whole-dollar amount shall, under such conditions
and to such extent as may be prescribed by regulations made under this title,
be computed to the nearest dollar. For the purpose of the computation to the
nearest dollar, the payment of a fractional part of a dollar shall be disregarded
unless it amounts to one-half dollar or more, in which case it shall be increased
to $1. The amount of any payment of cash remuneration so computed to the nearest
dollar shall, in lieu of the amount actually paid, be deemed to constitute the
amount of cash remuneration for purposes of subsection (a)(6)(B).
(d) For purposes of this title, in the case of an individual
performing service, as a member of a uniformed service, to which the provisions
of section 210(l)(1) are applicable, the term “wages”
shall, subject to the provisions of subsection (a)(1) of this section, include
as such individual's remuneration for such service only (1) his basic pay as
described in chapter 3 and section 1009 of title 37, United States Code[137],
in the case of an individual performing service to which subparagraph (A) of
such section 210(l)(1) applies, or (2) his compensation
for such service as determined under section 206(a) of title 37, United States
Code, in the case of an individual performing service to which subparagraph
(B) of such section 210(l)(1) applies.
(e) For purposes of this title, in the case of an individual
performing service, as a volunteer or volunteer leader within the meaning of
the Peace Corps Act[138], to which
the provisions of section 210(o) are applicable, (1)
the term “wages” shall, subject to the provisions of subsection
(a) of this section, include as such individual's remuneration for such service
only amounts certified as payable pursuant to section 5(c)
or 6(1) of the Peace Corps Act, and (2) any such amount shall be deemed to have
been paid to such individual at the time the service, with respect to which
it is paid, is performed.
(f) For purposes of this title, tips received by an employee
in the course of his employment shall be considered remuneration for employment.
Such remuneration shall be deemed to be paid at the time a written statement
including such tips is furnished to the employer pursuant to section 6053(a)
of the Internal Revenue Code of 1986[139]
or (if no statement including such tips is so furnished) at the time received.
(g) For purposes of this title, in any case where an individual
is a member of a religious order (as defined in section 3121(r)(2) of the Internal
Revenue Code of 1986[140]) performing
service in the exercise of duties required by such order, and an election of
coverage under section 3121(r) of such Code is in effect with respect to such
order or with respect to the autonomous subdivision thereof to which such member
belongs, the term “wages” shall, subject to the provisions of subsection
(a) of this section, include as such individual's remuneration for such service
the fair market value of any board, lodging, clothing, and other perquisites
furnished to such member by such order or subdivision thereof or by any other
person or organization pursuant to an agreement with such order or subdivision,
except that the amount included as such individual's remuneration under this
paragraph shall not be less than $100 a month.
(h) For purposes of this title, in the case of an individual
performing service under the provisions of section 294 of title 28, United States
Code[141] (relating to assignment
of retired justices and judges to active duty), the term “wages”
shall not include any payment under section 371(b) of such title 28 which is
received during the period of such service.
(i) Nothing in any of the foregoing provisions of this section
(other than subsection (a)) shall exclude from the term “wages”—
-
- (1) Any employer contribution under a qualified cash or
deferred arrangement (as defined in section 401(k) of the Internal Revenue
Code of 1954[142]) to the extent
not included in gross income by reason of section 402(a)(8) of such Code,
or
-
- (2) Any amount which is treated as an employer contribution
under section 414(h)(2) of such Code where the pickup referred to in such
section is pursuant to a salary reduction agreement (whether evidenced by
a written instrument or otherwise).
(j) Any amount deferred under a nonqualified deferred compensation
plan (within the meaning of section 3121(v)(2)(C) of the Internal Revenue Code
of 1986[143]) shall be taken into
account for purposes of this title as of the later of when the services are
performed, or when there is no substantial risk of forfeiture of the rights
to such amount. Any amount taken into account as wages by reason of the preceding
sentence (and the income attributable thereto) shall not thereafter be treated
as wages for purposes of this title.
(k)(1) For purposes of sections 203(f)(8)(B)(ii),
213(d)(2)(B), 215(a)(1)(B)(ii), 215(a)(1)(C)(ii), 215(a)(1)(D), 215(b)(3)(A)(ii),
215(i)(1)(E), 215(i)(2)(C)(ii), 224(f)(2)(B), and 230(b)(2) as in effect immediately
prior to the enactment of the Social Security Amendments of 1977), the term
“national average wage index” for any particular calendar year means,
subject to regulations of the Commissioner of Social Security under paragraph
(2), the average of the total wages for such particular calendar year.
(2) The Commissioner of Social Security shall prescribe regulations
under which the national average wage index for any calendar year shall be computed—
-
- (A) on the basis of amounts reported to the Secretary
of the Treasury or his delegate for such year,
-
- (B) by disregarding the limitation on wages specified
in subsection (1)(1),
-
- (C) with respect to calendar years after 1990, by incorporating
deferred compensation amounts and factoring in for such years the rate of
change from year to year in such amounts, in a manner consistent with the
requirements of section 10208 of the Omnibus Budget Reconciliation Act of
1989, and
-
- (D) with respect to calendar years before 1978, in a
manner consistent with the manner in which the average of the total wages
for each such calendar years was determined as provided by applicable law
as in effect for such years.
(3) For purposes of this subsection, the term “deferred
compensation amount” means—
-
- (A) any amount excluded from gross income under chapter
1 of the Internal Revenue Code of 1986 by reason of section 402(a)(8)[144]
, 402(h)(1)(B), or 457(a) of such Code or by reason of a salary reduction
agreement under section 403(b) of such Code,
-
- (B) any amount with respect to which a deduction is allowable
under chapter 1 of such Code by reason of a contribution to a plan described
in section 501(c)(18) of such Code,[145]
and
-
- (C) to the extent provided in regulations of the Commissioner
of Social Security, deferred compensation provided under any arrangement,
agreement, or plan referred to in subsection (i) or (j).