I am working to find basic information on rules regarding seasonal employees. I have read various IRS material and realize this is a complicated subject that will have to be handled by the employee benefits firm, but I was wondering if anyone could tell me if I am on the right track. The business currently has a plan that is open to employees, but only three employees participate, and of those three at least one is highly compensated. The business has many seasonal employees. The concern is that the plan in not in compliance. They are considering a safe harbor plan.
From what I read, there are no specific rules about seasonal workers. A plan can impose attainment age of 21 and completion of 12 months of service (considered 1,000 hours of work). Participation may be conditioned on two years of service, if each participate has a vested right. Is there any general information on the rules regarding having only three employees participate when there a hundred seasonal workers (assume more than 1,000 hours)? Thanks for any general information to help me clarify.
