Casual Labor Employees

[Guest TLCPension]

I have a plan which is based out of the State of Maryland. Supposively, the State of Maryland has a law which states, an employee catorigized as casual labor does not have to be provided benefits.

Can I exclude this type of class of employee even if some of them meet the hours requirement to enter the plan?

[Mike Preston]

No. ERISA would pre-empt such a law.

[mbozek]

workers could be excluded if under age 21 or if they are members of an excluded category provided that the plan still meets the 410(B) requirements.

[Mike Preston]

Note that an exclusion of casual employee (or part-time employee) can, even if it results in a plan that satisfies 410(B), result in a plan that fails 410(a). See example 3 of 1.410(a)-3(e)(2).

[mbozek]

Huh? The plan can always exclude employees who meet the age and service test if they are in a specified job classification, e.g., hourly employees. See Reg. 1.410(a)-3(d). This exclusion is subject to 410(B) testing. The restriction you cited under -3(e) prevents exclusion of part time employees who are members of a class not excluded from participating in the plan if they perform 1000 hours of service. A part time employee in an ineligible class cannot become a participant by performing 1000 hours of service.

[Mike Preston]

I think it depends on the definition of casual employee.

[Guest Lugeguy]

The first part of the question needs to define what is casual labor.

What is it and what does it mean to a company's benefit plan. Although the employer may classify someone as casual, that may be determined other wise by FLSA, ERISA, and benefit plan designs.

If the employee is scheduled to work on the average 30 hours a week, then they could be considered full time.

30 hours a week times 52 weeks translates to 1560 hours annually. To avoid including these part time employees then the plan document should read they must work at least 1500 per year to be considered eligible. Most plans I have seen read at the 1000 hours per year level.

Good luck,

Bob Rock