When is an employee really considered "hired"

[Guest DIGMYDOG]

We have a client that hires people "on call". Sometimes these employees do not earn any wages for months after their reported hire date. Also, the client terminates employees and then reports them as rehired after a month of their termination date even though these employees do not earn any wages for many months or even after several years.

This poses a problem as illustrated below:

participant with partially vested balance terms 10/2002

client reports ee as rehired on 11/02, but does not tell TPA until after plan year end

meanwhile, ee gets paid out (while they are on payroll records as rehired).

ee does not earn any more wages, they are on an "on call" basis.

Should Plan records show ee as rehired even though ee has not earned wages?

When is an employee considered a hired employee...when they work an hour of service and earn wages, or when the employer has them on the payroll records as rehired on "on call" basis?

Now...forfeitures have been allocated out of this ees account. Even though they have not been credited with an hour of service or earned any wages, should they have the option of repaying their distribution in order to get their forfeitures reinstated?

Also, if the ee doesn't ever get to work (is never called to work), should TPA accrue breaks in service for each year ee is on census?

This could get messy as the plan has a last day of plan year rule for allocating the match.

We are thinking of asking the employer not to report ees rehired as "on call" ees until they actually are credited with an hour of service and earn wages.

Any ideas or comments would be appreciated.