26 U.S.C. § 3231 — Definitions

(a) Employer. “Employer” means a carrier, and a company directly or indirectly owned or controlled by one or more carriers or under common control with them, that operates equipment or facilities or performs services connected with railroad passenger or property transportation or handling. It also includes a receiver, trustee, or other person or body possessing the property or operating the business. It excludes street, interurban, or suburban electric railways unless part of a general steam-railroad transportation system; the Surface Transportation Board must decide after a hearing, on the Secretary’s request or a complaint, whether an electric line falls within that exception. It also includes railroad and traffic associations, tariff, demurrage, weighing, inspection, and collection bureaus, and similar organizations controlled mainly by two or more employers and serving railroad transportation, and national railway labor organizations and their listed committees, departments, lodges, and divisions. It does not include a company because it mines coal, supplies coal to an employer only through the mine tipple, or operates equipment or facilities for those activities.

(b) Employee. An “employee” is an individual serving one or more employers for compensation, including an employer’s officer. It does not include a person performing the physical work of mining or preparing coal, handling coal other than rail movement with standard railroad locomotives beyond the mine tipple, or loading coal at the tipple.

(c) Employee representative. This means an officer or official representative of a railway labor organization other than one included as an employer, who before or after June 29, 1937, served an employer and is authorized to represent employees under the Railway Labor Act. It also includes a person regularly assigned or employed by that officer or representative for office duties.

(d) Service. A person is in an employer’s service, inside or outside the United States, if the employer continually has authority to supervise and direct how the person works, or if the person provides professional or technical work integrated into the employer’s staff, or other personal services on the employer’s operating property that are integrated into its operations, and the person does so for compensation. A person serves an employer other than a foreign-based local lodge, division, or general committee only when working for it in the United States. A local lodge or division qualifies only if nearly all its members work for an employer whose main business is in the United States, or its headquarters is in the United States. A general committee qualifies only if the person represents such a lodge or division, nearly all represented people work for a United States-based employer, or the person is its general or assistant general chairman representing people working in the United States. In the last case, if the office is outside the United States and the represented employees work for an employer whose main business is outside the United States, only the proportion of pay matching United States mileage counts; if that formula does not work, use the Railroad Retirement Board’s prescribed formula, and if the result is under 10 percent of the pay, none counts. A noncitizen or nonresident working outside the United States for an employer required by local law to employ local citizens or residents is not treated as serving that employer; the law in effect at the place on August 29, 1935, is treated as having applied earlier.

(e) Compensation. “Compensation” means any money remuneration paid for employee services. It excludes employer-plan payments for sickness, disability, medical, hospital, or death expenses, except includible group-term life insurance; tips except as paragraph (3) provides; separately identified travel or other bona fide necessary business-expense advances, reimbursements, or allowances; and remuneration that would not be wages under section 3121(a)(5). It also excludes qualifying nonresident-alien services performed temporarily in the United States under the listed immigration categories for their stated purposes. For taxes under sections 3201 and 3221, monthly compensation from a local lodge or division is disregarded if under $25. Convention-delegate compensation is disregarded if the person has not previously performed other service countable as Railroad Retirement Act years of service. Wage-withholding regulations do not automatically require the same compensation exclusion here.

(e)(2) After an employer has paid an employee remuneration equal to the applicable yearly base, later remuneration that year is not compensation, except that excluded remuneration is not counted in reaching the base and the rule does not apply to the specified hospital-insurance portions of sections 3201(a), 3221(a), and 3211(a). (B) The Tier 1 applicable base is the Social Security contribution and benefit base. For Tier 2 taxes and specified average-monthly-compensation calculations, disregard the cited Social Security subsection clauses. (C) The successor-employer rule in section 3121(a)(1) applies with “services” replacing “employment,” “compensation” replacing the specified remuneration phrase, and this section’s meanings for employer, services, and compensation.

(e)(3) For section 3201 taxes and related provisions, cash tips received in a calendar month count as compensation unless under $20. (e)(4) For sections 3201(a), 3211(a), and 3221(a), sickness or disability payments are excluded only if received under workers’ compensation law or the Railroad Retirement Act; Railroad Unemployment Insurance Act sickness benefits count except when the Board determines the sickness resulted from an on-the-job injury. Regulations may stop these rules after a comparable six-month period. Unless regulations provide otherwise, a third party making such a payment is treated as the employer for it. (e)(5) Exclude a benefit if it is reasonable at the time to expect the employee can exclude it from income under section 74(c), 108(f)(4), 117, or 132. (e)(6) Exclude a payment or benefit reasonably expected to be excludable under section 127. (e)(7) Repealed. (e)(8) Employer contributions described in section 3121(v)(1)(A) or (B) remain compensation despite other exclusions except the contribution-base rule. Section 3121(v)(2) rules for chapter 21 also apply here. (e)(9) Exclude meals or lodging reasonably expected to be excludable under section 119. (e)(10) Exclude payments reasonably expected to be excludable under section 106(b). (e)(11) Exclude payments reasonably expected to be excludable under section 106(d). (e)(12) Exclude remuneration for transferring stock^* under an incentive stock option or employee stock-purchase plan, or for disposing of that stock.

(f) Company. The term includes corporations, associations, and joint-stock companies.

(g) Carrier. The term means a rail carrier subject to part A of subtitle IV of title 49.

(h) Tips. Tips that count as compensation for section 3201 taxes are treated as paid when the employer receives the written statement required by section 6053(a), or, if no statement is provided, when the employee receives the tips.

(i) Related corporations. When related employer corporations concurrently employ one person and pay that person through a common paymaster that is one of them, each corporation^* is treated as paying only what it actually disbursed, not what another related corporation disbursed.