Non participation in safe harbor 401k by non HCE

[Guest BILL SMITH]

I am setting up a Safe Harbor 401k plan for a sole proprietor. There are a total of 4 employees, the owner, his wife and two clerical.

If he opts for the mandatory match contribution rather than the profit sharing but the 2 clerical ee's choose not to defer, does the plan still qualify as a safe harbor plan and the husband and wife may defer up to $10k?

[Guest JB2]

This would be okay, but the plan will probably be top-heavy and then the clerical employees would have to receive a top-heavy contribution.