Eligibility--Counting hours worked as student in work-study program

[Guest MAK13]

Our Defined Contribution retirement plan requires employees to complete a year of eligibility service before they begin participating in the plan. The year of eligibility service is defined as 1,000 hours of service during the 12 month period beginning on the employment commencement date. Students are not eligible for the plan. Sometimes we hire new graduates who performed services under the "work-study" program when they were students. Are we required to count the hours of service they performed in the work study program in determining whether they have completed a year of eligibility service?

[PLAN MAN]

Were the students considered employees when they were in the "work-study" program? How were they treated for payroll taxes, etc. in the "work-study" program? How are you treating them upon hire for other employee benefits (medical, dental, etc.)?

[Guest MAK13]

They were not considered as employees. Their hours work off their financial aid, and are not subject to payroll taxes. They are eligible for the health plan when they are hired as full-time employees.