Model Benefit Plan/Compensation Practice Exclusion Provision

Our firm has developed a model provision designed to exclude contingent workers from benefit plans and other compensation practices even when their employment status has been misclassified. This generic provision must be customized to each employer's individual circumstances. Some employers may not want to include all exclusion categories; others may wish to add exclusions unique to their industry. Our model provision may not be appropriate for usein certain kinds of programs, most notably qualified employee stock purchase plans, which must cover substantially all employees.

Model Exclusion Provision

While a person is performing services in one of the following categories, he or she shall not be entitled [to participate in this Plan or receive Plan benefits] [to accrue or receive [identify compensation item, for example, paid vacations]], notwithstanding anything else tothe contrary:

(a) A Temporary Employee, i.e., a person who is classified by the Company as employed on a temporary basis, regardless of how long the person actually works for the Company. (See Footnote 1.)

(b) A Project Employee, i.e., a person who is classified by the Company as working on discrete projects or creative matters, (See Footnote 2.) except to the extent the Company, by written notice, elects to extend [for example, Plan participation] to the individual. (See Footnote 3.)

(c) A Production Company Employee, i.e., a person who is classified by the Company as a production employee, except to the extent the Company, by written notice, elects to extend [for example, Plan participation] to the individual.

(d) An Independent Contractor, i.e., a person who is classified by the Company as an independent contractor, as evidenced by its failure to withhold taxes from his or her compensation, even if the individual really is the Company's common law employee.

(e) A Contractor's Employee, i.e., a person working for acompany providing goods or services (including temporary employee services) to the Company whom the Company does not regard to be its common law employee, as evidenced by its failure to withhold taxes from his or her compensation, even if the individual really is the Company's common law employee.

(f) A Leased Employee, i.e., a person who is a leased employee within the meaning of Internal Revenue Code Section 414(n).

(g) A Person Who Has Waived Participation, i.e., a person to whom the Company did not extend the opportunity of participating in this [for example, vacation program] who agreed orally or in writing to such nonparticipant status. (See Footnote 4.)

(h) An Otherwise Excluded Individual, i.e., a person excluded from this [for example, Plan] by any other provision.

Plan/Program Summary or SPD Provision

You will not be eligible [for example, for any employer-provided or sponsored benefits or compensation practices, including such things as paid vacations and health benefits] while the Company regards you to be

• a temporary employee
  
• a project employee
  
• a production company employee
  
• an independent contractor
  
• the employee of a nonparticipating employer who provides goods or services to the Company
  
• a leased employee
  
• [list other excluded categories]

even if you really are an otherwise eligible employee of the Company. In addition, the Company may decline to offer participation to any otherwise eligible individual, and such an individual shall be ineligible if he or she orally or in writing consents to his or her exclusion.

Individual Consent

Regardless of my employment status, I understand that I will not be entitled to receive any employee welfare, pension, or fringe benefits of any type from [name of company], including such things as [stock options], [bonuses], or [vacations] [, subject to the following exceptions: I will be entitled to [describe]]. I have not been given the option of electing to participate in any of the programs from which I am being excluded. I understand the significance of my exclusion from these programs. I irrevocably agree to my exclusion.

______________________
Name

______________________
Signature

______________________
Date

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1/ It likely would be inappropriate to use this provision in aqualified retirement plan. Instead, a one-year service requirement, for example, could be imposed. return

2/ It may also be inappropriate to use this provision in aqualified retirement plan. Instead, a one-year service requirement, for example, could be imposed. return

3/ This and the next category are principally relevant to entertainment industry employers. Some employers may wish to include other industry-specific exclusion categories. return

4/ This catch-all category is intended to cover any other worker who agrees to work without benefits. return