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separation from service


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Guest JBauer
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1.409A-1(h) provides that an employee is not considered to have separated from service during a bona fide leave of absence for up to six months, or later, if and as long as the individual has a statutory or contractual right to reemployment.

Can the right to reemployment be conditional? I am considering whether certain employees that have been laid off, subject to a right of recall in the event the company recommences hiring, have a "contractual right to reemployment" and are therefore considered to have a continuing employment relationship. The language in the regs (specifying military, sick, or other bona fide leave) leads me to believe that such recall rights do not establish a right to reemployment, and they are consequentely separated from service.

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