Rehire after rollover

[Guest CeCe_4_UNCP]

A part-time employee is allowed to contribute to a 401K plan but is laid-off a few months later. Forced distrubtion was processed for less than $200, the employee was later rehired 2-3 months following. A few weeks into employment, HR is now threatening layoff again advising employee that they should not have been re-hired until 6 months after distribution had been processed. Is this valid? Is there any reg that allows the employer to enforce termination? Does it make a difference that the employee works in an "at-will" state?

[david rigby]

... should not have been re-hired until 6 months after distribution had been processed.

Is this a personnel policy?

[Kevin C]

Forced distribution was processed for less than $200 ...

Maybe repaying the less than $200 distribution would make the issue go away?

[masteff]

A few weeks into employment, HR is now threatening layoff again advising employee that they should not have been re-hired until 6 months after distribution had been processed.

Sounds like someone in HR is too procedurally oriented to realize that the cows are already out of the barn on this one.

My guess is the policy is to prevent the appearance of a "sham" termination (i.e., let go solely for the purpose of obtaining a distribution from the plan and then quickly rehired). So Kevin's suggestion is highly relevant... they would have no appearance of a "sham" termination if the distribution is repaid to the plan.