Beginning July 2, 1991, Section 11332 of Public Law 101-508 mandates Social Security coverage for State and local government employees who are neither members of a qualified retirement system nor covered by a Section 218 Agreement, unless coverage is specifically excluded by law. The mandatory Social Security provisions apply to those State and local employees who have the option to become members of the retirement system but have chosen not to do so (optionals) as well as those employees who are personally ineligible for membership in the retirement system (ineligibles).

Because voluntary coverage under a State’s Section 218 Agreement precludes application of the mandatory provisions, always verify whether a position is covered under the State’s Section 218 Agreement first before considering whether the individual employee in that position is subject to mandatory Social Security coverage. If the employee’s position is covered by the State’s Section 218 Agreement, then the employee is covered regardless of possible participation in a qualified retirement system.

A “qualified retirement system” is a pension plan maintained by a public employer that meets certain criteria established by the Internal Revenue Service (IRS) (see IRS Revenue Procedure 91-40; 26 C.F.R. § 31.3121(b)(7)-2). The mandatory Social Security provisions do not apply to any individual employee who participates in a qualified retirement system

IRS is responsible for determining whether an employee is a member of a qualified retirement system under its rules.

Mandatory Social Security coverage ceases either (1) when a state or local government employee becomes a member of a qualified retirement system or (2) where a State expands coverage under its Section 218 Agreement to the employee’s position.

The following services are excluded from mandatory Social Security coverage. Some services, while excluded from mandatory coverage are optional exclusions under Section 218 and, therefore, may be covered under a Section 218 Agreement. The exclusions that may be covered under a Section 218 Agreement are noted below.

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  Services performed by individuals hired to be relieved from unemployment. (This does not include many programs financed from Federal funds where the primary purpose is to give the employee work experience or training.)

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  Services performed in a hospital, home, or other institution by a patient or inmate of such institution as an employee of a state or local government employer.

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  Services performed by an employee on a temporary basis in case of fire, storm, snow, earthquake, volcano, flood, or other similar emergency.

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  Services performed by non-resident aliens with F-1, J-1, M-1, and Q-1 visas.

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  Services in positions compensated solely by fees that are subject to the Self-Employment Contributions Act (SECA), unless a Section 218 Agreement covers these services.

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  Services performed by a student enrolled and regularly attending classes at the school, college, or university where they are working, unless a Section 218 Agreement covers student services.

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  Services performed by an election worker or official whose pay in a calendar year is less than the amount mandated by law, unless a Section 218 Agreement covers election workers. To find the coverage status of election workers for each State, see the Election Worker Coverage Chart.

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  Services that would be excluded if performed for a private employer because it is not work defined as employment under Section 210(a) of the Act, unless a Section 218 Agreement covers certain agricultural services.