Employee Deferrals for Part-time employees

[Guest JCONNER]

I am also working on a plan that has a participant who cleans the kitchen monthly. She gets an extra check for $100 each month for this cleaning and it is counted in her W-2 wages. The document defines compensation as W-2 wages; however, this lady doesn't want deferrals taken out of this extra check, only from her regular employee checks. Can she do this?

[This message has been edited by JCONNER (edited 10-23-98).]

[Larry M]

It seems as if the W-2 wages must be counted for all plan purposes.

If the employee only wants to defer 3% of wages other than the $100, the employee should calculate the dollar amount and make the deferral a dollar amount rather than a percentage.

If the employee wants to defer 3% of the total, including the $100, then that dollar amount can be deducted from the rgular employee check as well.