Does worker on "Layoff" enter plan?

[Guest Dash02]

Sponsor's business is poor so a number of employees were "laid off" effective Dec. 1, 2005, meaning that the company intends to call the workers back to work when (and if) business picks up. No compensation is paid while on layoff and the workers qualify for govt. unemployment benefits.

Three of those laid off on Dec. 1, 2005 had met the eligibility req (yr of service) and were on track to reach their entry date into the 401k plan on Dec. 15, 2005. The plan only considers comp received while a participant. The laid off workers will not be called back to work prior to the end of the 12/31/2005 plan year.

Questions:

1. Do these 3 workers enter the plan on their Dec. 15, 2005 entry date despite their layoff status?

2. If so, how are they treated with respect to the current year ADP testing in view of the fact that they will have zero deferrals and zero participant compensation for the 2005 plan year.

Thanks in advance.