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The allocation condition to be an active employee on the last day of the plan year typically applies to employer contributions such as non-elective contributions or matching contributions (allocated annually). The fact that the last day is on a Sunday is not an issue for employees who are continuing actives. The common decision a plan administrator has to make is whether an employee formally terminates employment and/or retires on the last pay date (6/28 in the question). Some plan administrators take the position the last day is satisfied if the employee worked on the last available work day. Some plan administrators take the opposite position. Some plan administrators consider the reason for the termination (retirement, disability, voluntary termination, involuntary termination). Some plan administrators look at payroll practices so if an employee is paid for a pay period that includes the last day of the plan year, then the employee was active on the last day. Some plan administrators look at how the last day is defined in their health and welfare plans. Whatever or however the decision is made, it must be applied consistently and uniformly to all similarly-situated employees. If the plan is top-heavy, the plan could exclude an employee who is not active on the last day from getting the top heavy minimum contribution (if there is one). Again, be careful that the decision is applied consistently and uniformly.

Does the plan permit hardship distributions? If so, from what sources? What is the amount of the financial need? Does the plan use the safe harbor definition of financial hardship, or does it use the facts-and-circumstances definition? If it uses the safe harbor definition, under which reason does the participant purport to qualify? No. Suspending deferrals after a hardship distribution has not been required (and has been illegal, actually) since 2019. A hardship distribution is not an eligible rollover distribution so the automatic withholding rate for federal income tax is 10%. The participant could waive that, or elect a different amount. If the participant is under age 59½ and does not meet any of the exceptions under IRC 72(t), then the distribution would be subject to the 10% penalty tax, in addition to income tax at the participant's normal tax rate.

Yes. Class specific match groups are written into plans all the time. Usually done only for regular match (not safe harbor or its variants). As long as testing (coverage, ACP etc) passes its fine.

Sure, as long as they don't mind disqualifying their CODA. Think of it like a participant who made a deferral election, then got their paycheck but decided they contributed too much to the 401(k), and wanted some of it back after the fact. What would you tell them?

In my work with many professional service firms, they do these kinds of non qualified deferred comp programs quite often. Usually the partner will "retire" as a partner and continue working for 2-5 years. Those plans would almost always use 3401(a) as the definition of compensation because those non qualified distributions are considered earned income in that definition. Allows the former partner to still defer into the 401(k) plan if desired.

Unless the Plan excludes them somehow, I don't see why they would not be an eligible employee if they were rehired as a W-2 employee. Now if you are wondering about what compensation is eligible for Plan benefits, again that would be defined in the Plan document.

I have not - if you're not required to why do extra unnecessary work?

There was a bill proposed last year that would have required automatic re-enrollment of participants who opted out or who enrolled at a lower percentage than the auto-enrollment default. If a new law would be needed to require auto re-enrollment, then it stands to reason that auto re-enrollment is not required under current law.

If the error had not occurred, would she have received match? If so, then she should receive 100% of the match that she would have received had the error not occurred. (Rev Proc 2021-30 Appendix A Section .05)

It needs to be spelled out in the Plan Documents. And I believe in a manner that does not allow for discretion.

Well the first thing regarding that - The plan documents probably indicate how the THMs are allocated in either, both, or (perhaps likely) just the DC plan. If the DC plan document says all the non-keys get 5%, then they get that regardless if TH could have already been covered. The rate of accrual in the CB plan doesn't matter as much, like how DC plans can sneak by with a lower THM rate if no Key gets to 3%.