Employees for 401(k) plan purposes?

[Guest KMP]

We are trying to determine if a client of ours needs to consider two individuals "employees" for purposes of his 401(k) plan. The client is a realtor who has 2 full-time administrative assistants. They are not being paid by the client, but they are being paid from the main Realty Company and the client reimburses the Realty Company. The Realty Company has stated that they are not employees of the Realty Company, and they just process their payroll as a courtesy to our client.

The work of these two individuals appears to be controlled by the client.

Our thought is that they are employees of the client and need to be considered in the 401(k) plan if they meet eligibility. Any thoughts on this would be appreciated.

[Guest Genevieve]

We are trying to determine if a client of ours needs to consider two individuals "employees" for purposes of his 401(k) plan. The client is a realtor who has 2 full-time administrative assistants. They are not being paid by the client, but they are being paid from the main Realty Company and the client reimburses the Realty Company. The Realty Company has stated that they are not employees of the Realty Company, and they just process their payroll as a courtesy to our client.

The work of these two individuals appears to be controlled by the client.

Our thought is that they are employees of the client and need to be considered in the 401(k) plan if they meet eligibility. Any thoughts on this would be appreciated.

By definiition, these two would not be classified as leased and therefore he may not exclude them. For more information regarding leased or misclassified employees, see http://www.ssbb.com/eba1297.html

[Guest Pensions in Paradise]

Your client should consult a labor attorney. There are bigger issues involved here.