Quiero saber acerca de...

lotter on DSK11XQN23PROD with RULES2

Federal Register / Vol. 86, No. 174 / Monday, September 13, 2021 / Rules and Regulations proposal. The Council and some others asked that third-party contractors not be considered employees as was stated in the proposed rule preamble. The Council, CoBank and a few commenters also asked for exemptions to the definition for persons employed only temporarily, suggesting a 6-months or less timeframe, to recognize seasonal workers and summer interns. FCB of Texas requested that the current definition be retained, pointing out the current definition does not include contractors. CoBank asked that contractors be removed from the definition, stating its inclusion raises employment law issues. A few commenters asked that employee and officer be kept as separate terms since consolidating them creates confusion for training and reporting requirements.
One commenter asked that the word working be replaced with employed to avoid including independent contractors.
In the final rule, we adopt the suggestion to replace employed with working within the definition of employee. We have also modified our proposed definition of employee in response to comments received to clarify the term does not include those persons not maintained on the institutions payroll, which we believe would include those for whom the institution withholds payroll taxes. In the final rule text, we specifically identify that independent contractors are not employees for purposes of the standards of conduct rules. Generally, an independent contractor can be identified: 1 By how he or she is paid, which distinguishes them from those on the payroll e.g., someone who receives an Internal Revenue Service IRS Form 1099NEC or similar document from the institution 9 and 2 if employee-type benefits are provided i.e., pensions, insurance, vacation pay by the institution. We use the example of payroll versus an IRS form only to illustrate what would be a clear indicator of employment status, but it will not always be the deciding element.
We also explain in this preamble that we consider an employee to be a person in the service of another under any contract of hire, express or implied, oral or written, where the employing institution has the power or right to control and direct the employee in the material details of how work is to be performed. Conversely, we consider an 9 IRS Form 1099NEC is used by payers to report payments made in the course of a trade or business to others for services. If you paid someone who is not your employee $600 or more for services provided during the year, a Form 1099NEC is issued January 31 of the year following payment.

VerDate Sep<11>2014

19:08 Sep 10, 2021

Jkt 253001

independent contractor to be someone who contracts to do a piece of work according to his or her own methods and who is subject to the contracting institutions control only as to the end product or final result of that work.
We are not exempting seasonal employees as suggested by commenters.
We believe that temporary employees, including interns, regardless of how long employed, may have positions in the institution that put them in contact with sensitive information that could be used in misconduct. Therefore, we believe temporary and other short-term employees who are being paid by the institution should be held to the same standards of conduct as fulland parttime employees.
The proposed rule would have eliminated the definition of officer because officers are a type of employee.
Commenters asked that we retain the part 612 definition of officer as the term is useful in differentiating prohibited actions and reporting requirements amongst general employees and those specific to officers.
In response to this request, we are not removing the definition of officer as was proposed.
1e. Entity The term sole proprietorship was proposed as an addition to the definition of entity. FCB of Texas and one other commenter asked that we remove sole proprietorships from the definition as those businesses are normally understood to be other than an entity. FCB of Texas suggested that we include businesses owned by one or more individual in the definition, such as unincorporated business entities, limited liability companies, or limited partnerships. The final rule addresses these comments by adding explanatory parentheticals for partnerships and trusts and by removing sole proprietorships from the definition.
The explanatory parentheticals address comments on capturing unincorporated businesses by explaining a partnership can be general or limited and a trust can be formed for business or otherwise.
Also, the term sole proprietorships is moved to the definition of person to ensure that type of operation is captured.
1f. Family As proposed, the phrase significant other would have been added to the definition of family. The Council, three FC banks, and 83 other commenters remarked on this proposal. The Council, FCB of Texas, three commenters from AgFirst FCB, and many other commenters objected to the proposed
PO 00000

Frm 00005

Fmt 4701

Sfmt 4700

50959

use of significant other in the definition, with some asking for its removal or replacing it with civil union partner. Many commenters stated the expanded definition was burdensome for reporting purposes and unreasonable because it created the expectation that institutions make the determination as to the seriousness of an individuals relationship status.
CoBank and some other commenters asked that the use of significant other in the definition be removed as it is a vague term and several commenters explained that there is no common understanding of the phrase. Some commenters specifically remarked that significant other needed to be defined. One commenter supported adding significant other to the definition.
The Council, CoBank and FCB of Texas suggested that instead of quantifying relationships under the definition of family by using specific titles, we should use the description applied in the Standards of Conduct regulations for Farmer Mac regarding households and financial dependence.10
Specifically, they suggested we define family as all persons residing in the household or who are otherwise legal dependents. The Council and some others also suggested keeping the existing 612.2130 definition of family as it has a clearer means of identifying who is covered by standards of conduct requirements. FCB of Texas and two other commenters suggested limiting the scope of family to immediate family as is done under 12
CFR part 620 regulations for annual reports. A few commenters agreed it was important to include those seen as family but preferred to limit it to those living in the household or the immediate family. AgFirst FCB observed that the proposed definition of family does not require a legal relationship in all cases.
Additionally, the individual commenters from the FC banks and several commenters expressed concern with expanding the definition to include cousins, as was discussed in the proposed rule preamble. Some commenters said that would create a broad burden as there was no accompanying limit on if only first cousins were contemplated or more lineal remote cousins. These commenters asked that the term not include cousins, but if it does, then it should be put in the regulatory text.
These commenters also asked that if cousins were included, it be limited to first cousins and to only those first 10 12

E:FRFM13SER2.SGM

CFR 651.22.

13SER2