common law employee

[Scuba 401]

can a spouse of the shareholder of a PA who performs services for the PA but does not get paid be considered a common law employee?

[Kevin C]

I'm guessing this is an eligibility question, as in does the unpaid service for the spouse count for eligibility? The problem is going to be with the plan's hour of service definition. Ours starts with: Hours of Service include each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Employer. Even the equivalency options require an "hour of service" as defined in the plan during a specified period to get credited for hours. We've had this come up a couple of times and reached the conclusion that no, the spouse's unpaid services do not count as hours of service.