Determining Coverage Status
An initial coverage status determination is made for every railroad employer. The term "employer" is defined in Section 1 of both the Railroad Retirement Act (RRA) and the Railroad Unemployment Insurance Act (RUIA).
Generally, the Railroad Retirement Board (RRB) initiates a coverage review of an employer or employee based on the following circumstances:
- Information received from employers, employees or other private individuals;
- Information concerning a related company identified during a compliance audit of a carrier;
- Information that demonstrated individuals rendering services to a covered employer as independent contractors may be more appropriately classified as employees;
- Information received concerning potential employers from other federal agencies; and
- Information or referral received from the RRB's Inspector General.
The Audit and Compliance Section of the RRB's Bureau of Fiscal Operations (BFO-A&C) investigates and obtains coverage information from prospective employers and employees. The information is then shared with the RRB's General Counsel (OGC). After review, the OGC submits a written recommendation concerning the coverage or non-coverage of the employer/employee to the three member Board. A formal determination regarding coverage is issued when a majority of the Board Members agree on a decision. If the employer/employee involved disagrees, they have the right to seek reconsideration within a year of the decision to seek reconsideration from the Board.
NOTE: It is presumed all employees of covered employers are covered under the RRA and RUIA.
Changes in Coverage Status
RRB regulations (20 CFR 209.5) states it is the duty of an employer to notify the RRB of changes affecting the employer's coverage status. If your organization has experienced changes affecting its coverage status as a covered employer under the RRA and RUIA, contact the:
Bureau of Fiscal Operations - Audit and Compliance Section
U.S. Railroad Retirement Board
844 N. Rush Street
Chicago, IL 60611-1275
Employee Coverage Determinations
Employee coverage determinations are made by the RRB's three member Board and not an employer. An independent contractor could be found to be a covered employee after a coverage investigation by BFO-A&C. Questions concerning the coverage of specific individuals should be directed to a Coverage Specialist in Audit and Compliance by
- Phone (312-751-4831),
- Email (Audit&Compliance@rrb.gov), or
- Mail (Bureau of Fiscal Operations - Audit and Compliance Section, U. S. Railroad Retirement Board, 844 N. Rush Street, Chicago, IL 60611-1275).
For a definition of employees covered under these Acts, see Part IV,Chapter 9 of the Employer Reporting Instructions.
A segregated employer is an employer whose business consists of non-railroad operation which are not covered under the RRA and RUIA and railroad operation which are covered under the RRA and RUIA. The employees performing service for the railroad operations part of the business would be covered under the RRA and RUIA.
If any company or person has business segregated or separated from non-carrier business, submit the history of those operations to the Board. The Board will then make a determination and render a decision as to whether the segregated business conducted by the person or company meets the criteria of a covered employer. See 20 CFR 202.3.
FICA and State Unemployment Tax Exemption
Employers who are covered under the RRA and RUIA do not pay Social Security taxes under the Federal Income Contributions Act (FICA) nor do they pay unemployment taxes under any state law or the Federal Unemployment Tax Act.
For More Information
To view an online presentation about Employer and Employee Coverage Determinations, you can access RRBVision.