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Question 188: A temp agency has about 200 internal staff employees and several thousand temps nationwide, most of whom work more 1,000 hours per year. These temps are true temps and are most likely common law employees of the staffing firm. The agency wants to set up a 401(k) plan for the internal staff, but they do not want to cover the temps. Rev. Proc. 2002-21 seems to imply that the temps are not employees of the agency. If so, can the agency's plan cover only the internal staff (which has all of the HCEs), exclude the temps, and still pass the minimum coverage test of Code section 410(b)? |
Answer: You're reading too much into the Rev. Proc. |
Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.
The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.
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