Leased Employee hired

[Dougsbpc]

An employer sponsors a 50 participant 401(k) plan.

They recently leased an employee for the first time. She has now been working with them for 6 months and now the plan sponsor wants to hire her.

Even if she would have stayed with the leasing organization, she worked 35 hours a week and after one year would be considered "substantially full time" and would have had to be included in the plan.

The leasing organization does not maintain a plan of any kind.

Would the 6 months of service with the leasing organization count toward hours for eligibility and vesting once they hire her as an employee?

Thanks.

[masteff]

6 months is not year, so no because she did not actually reach the definition of a leased employee under 414(n).

[mariemonroe]

I think you ignore the one year requirement pursuant to 414(n)(4)(B).