Worker cooperatives

[Belgarath]

This a question of curiosity only, as I don't know of any such situation.

Has anyone ever done a plan for a worker cooperative? If you do, how does it work - for example, are employees paid on a W-2, or are they treated as individual "self-employed" people? I'm under the impression that cooperatives pay out amounts similar to an S-corp "pass-through" payment, but some payments are taxable and others aren't, etc... - and perhaps these are in addition to W-2 salary.

And would a worker cooperative "deduct" any qualified plan payment? I think the cooperative, as an entity, perhaps isn't subject to federal tax anyway - money is either legally retained to a certain extent - whatever that might be - or paid out either in a taxable or non-taxable form?

Again - just idle curiosity.