Employee status?

[k man]

If an employee starts working as a temp via an employment agency and then gets hired by the employer, when is the employees commencement date for purposes of participation etc.? The plan also excludes leased employees.

I believe it is the date that they are hired by the employer, not the date they start as a temp with the agency.

[Guest SPOT]

What does the plan document say? It should tell you whether service as a leased employee is considered for eligibility and vesting purposes.

[k man]

I do not believe it specifically credits service as temp/leased employee but it does permit you to exclude leased employees.

[Belgarath]

I find leased employee questions rather difficult, not least because the definitions used are frequently used differently by different people. Some people used the term "leased employee" to mean anyone hired from a temp or leasing agency. Others use it more under the statutory definition, which means they are not "leased employees" until they meet the 414(n) requirements, including being employed on a substantially full-time basis for at least one year. See IRS Notice 84-11.

Assuming the latter, and based upon your statement that the plan excludes leased employees, then if they have otherwise satisfied all other eligibility requirements, and would particpate but for being in an excluded class, then they will become participants immediately upon being hired as a common law employee. In other words, you would count service while they were "leased."

Again, these situations are tricky enough that I hesitate to attempt general answers, so this may not be good for much!

[mbozek]

Most plan documents explicitly exclude leased employees from being eligible to participate in the plan. However, some plans will give the employee service credit for a period of time that the employee was employed by the leasing organizaton. Some plans do not specificy whether an employee with prior service as leased employee can have that service credited after become an elibible employee under the plan. Need to read plan documents.

[k man]

Belgarath, our plan document does not specifically credit service while the employee was leased so what is the statutory authority that says we need to credit service while they were leased?

Are you saying that this is the way you would treat any other employee who was part of an excluded class but then changed status and was no longer part of that excluded class?