Actual Hours of Service Crediting

[emmetttrudy]

An employee worked only 2.5 months out of the year and then terminated. She got paid for about 500 hours of actual services rendered, so normally would not be eligible for a profit sharing contribution. However, she also got paid out for approximately 510 hours of accumulated sick, leave, vacation, etc. time leaving her with slightly over 1,000 hours in the plan year. For purposes of the 1,000 hour allocation requirement should all of these 510 hours count in the year of termination? Do you count the hours for the time period in which you are paid for them? Or could you argue that most, if not all, of them were accrued in past years?

[GMK]

a drive-by comment:

I think I recall that you count up to 501 hours of time paid when not working, but check your plan document.

[Kevin C]

What does the plan document say? Our VS document limits hours credited for nonperformance of duties to a maximum of 501 for a continuous period. That section specifically mentions vacation, holidays, sick time, etc. It also incorporates 2530.200b-2.

[emmetttrudy]

OUr VS says the same thing. It just seems unsual to have to count 501 hours of service when that vacation, sick, etc. time was accrued over a lifetime of employment, not specifically this plan year. But it looks like it all needs to be counted if she was paid for it in this time period.