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Plan has automatic enrollment (3% of pay). Payroll date: 7/2/1015 (includes wages for service provided through June 27) Payroll provider's cutoff for paycheck changes: June 28. Four new employees might enter on July 1. One of these 4 quits June 30 and gets a paycheck on July 2 and another on July 17. No deferrals withheld from either. No problem. The other 3 did not return any deferral elections. They get paychecks on July 2. No deferrals withheld. Automatic deferrals withheld on July 17. Problem? Document says "An Eligible Employee shall be deemed to have made an elective deferral election upon satisfaction of the eligibility requirements..."" ... provided however that in a reasonable time before the deemed election takes place the Eligible Employee shall receive a notice that explains the ... right to elect to ... alter the amount, ... including the procedure for ... the timing for implementing such election.""The Eligible Employee must have reasonable opportunity to file an election to receive cash in lieu ... before such deemed election...""The Company shall contribute to the Plan with respect to each pay period an amount equal to the Elective Deferrals . . . for such pay period"The Plan Administrator intends to implement this uniformly and consistently. Do they have a valid legal basis for not withholding on July 2 for these other 3 employees?
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- Automatic enrollment
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