Nonunion work for union employees

[Guest rgorman]

I have a client with a profit sharing plan with no eligibility requirements. It is a small plan covering only around 8 employees. Most of the company work is done by union employees whose benefits are under a CBA and they are excluded from the plan.

Client had questions on situations that have come up with several union employees.

1) Some union employees work for the client when there is no union work, doing another type of job to fill in the caps from the union work. Client wants to know if for those periods of time and the compensation paid during those times, does he have to include them in the profit sharing plan. Has anyone encountered this before. It is usually more cut and dry between union and nonunion.

2) Client also has retired union workers that have come back to work for the client to help in a smaller role on the jobs for extra cash. The employees do not want to be under the union or get benefits from the company. Just want some extra cash. Do not feel comfortable saying they should do 1099 since they are working for the client. Anyone have experience with this?

Any thoughts would be appreciated.

[david rigby]

1. Could this already be identified in the CBA?

2. The employer could easily handle this if the plan had some eligibility requirements.

[Guest rgorman]

Per the client it is not addressed in the CBA. We could add eligibility requirements ongoing but we have some employees under both categories who have already worked.

I am concerned that if they are not willing to go under the union we will have to include them and will also have to pull those in that have already done some nonunion work?

[Guest CudaLarry]

Per the client it is not addressed in the CBA. We could add eligibility requirements ongoing but we have some employees under both categories who have already worked.

I am concerned that if they are not willing to go under the union we will have to include them and will also have to pull those in that have already done some nonunion work?

This is OT, but if the retirees are covered under a union health plan for retirees, make sure that returning to work in a non-bargaining unit position doesn't put their health benefits in peril. Some union plans say that retirees lose eligibility if they work non-union.

[PLAN MAN]

The regulations under 410(b) define who is an union employee. See 1.410(b)-6(d)(2)(i): Treas. Reg.

(2) Definition of collectively bargained employee —(i) In general. A collectively bargained employee is an employee who is included in a unit of employees covered by an agreement that the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers, provided that there is evidence that retirement benefits were the subject of good faith bargaining between employee representatives and the employer or employers. An employee is a collectively bargained employee regardless of whether the employee benefits under any plan of the employer. See section 7701(a)(46) and §301.7701–17T of this chapter for additional requirements applicable to the collective bargaining agreement. An employee who performs hours of service during the plan year as both a collectively bargained employee and a noncollectively bargained employee is treated as a collectively bargained employee with respect to the hours of service performed as a collectively bargained employee and a noncollectively bargained employee with respect to the hours of service performed as a noncollectively bargained employee. See §1.410(b)–7© for disaggregation rules for plans benefiting collectively bargained and noncollectively bargained employees.