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Hey, if the plan allows for 401(k) rate changes any time (rather than quarterly), then the move to make is to go in and alternate weeks between Roth and pre-tax. HR will love you, and the point will have been made. And, you'll have the amounts split the way you wanted the whole time.

Simple; tell the client NO. It probably is even interfering with his ERISA rights. You can't condition contributions, for example, on not stealing from the company even though that makes more sense that this nonsensical request. If he really wanted to do it and you wanted to administer it (both bad choices), he needs to get a legal opinion from a competent ERISA attorney, so spend a few thousand dollars to find out the answer is still NO!

I asked because the 50% threshold does not apply to S-corps. Since they are C-corps, you might not actually have an ASG, even though it seems like it should be. Here is a section from Who's the Employer, example 14.14.2 seems to be on point:

Agree w/CBZ and as I have said before, just because you CAN do something doesn't mean you SHOULD. Documentation would be problematic unless you had the employee sign a release that (s)he did not provide notice. What do you do if someone just stops showing up later in the year? Did they quit w/o notice (no match) or did you fire them for not showing up (match), or do they plan on no match if fired? So you must work 520 hours and terminate voluntarily with notice and remain employed through notice period? Then what happens if I give notice and after a week my employer says I don't need you for the next week, today is your last day? This is so rife with potential problems - do your client a big favor and talk them out of this mistake like a good consultant.

As I stated in my comment I don't think there is a 100% agreement on what 1 YOS means in this context. I think most people would say the YOS is hit on 1/1. But no one says they have been married 1 year on the say before their anniversary. Likewise, people don't say their child is 1 the day before their birthday. So the common English usage of the term 1 Year of Service would seem to say it was up on 1/2 not 1/1. In fact I have worked for a number of TPA firms their software would say the YOS was hit on 1/2 and this person would enter 7/1. When I try to explain why the firm works for says it is 1/1 and not 1/2 I get a call from most of my clients who don't understand our thinking. Once I spell it out they go with our recommendation but it is clear they could have lived with 1/2 and the person entering 7/1. As far as I can tell the IRS and DOL haven't opined on the topic and I haven't ever seen a plan that uses the 1/2 and have the person enter on 7/1 get hit by the IRS or DOL. In fact the first time someone brought this up to me my reaction is this is yet another example of people over thinking things in this industry. (That happens a lot in this industry just read a random selection of questions on this board where people get all bent out of shape over immaterial amounts) I am still of this opinion I just don't care to debate it with the people I work with. So if the firm has a policy of saying in this case it is 1/1 and the document says on or next following in the DOE definition I go with it. But deep down I don't see how anyone can pound the table and say they have to be right by doing that and any other take just has to be wrong.