Subscribe (Free) to
Daily or Weekly Newsletters
Post a Job

Featured Jobs

Fund Administrator

Plumbers Local Union No. 1 Benefit Funds
(Long Island City NY)

Retirement Plan Specialist

RTD Financial Advisors
(Philadelphia PA)

RTD Financial Advisors logo

DC Plan Administrator

Retirement, LLC
(Remote / Oklahoma City OK)

Retirement, LLC logo

Compliance Analyst

Pentegra
(Remote / West Harrison NY)

Pentegra logo

Retirement Plan Administrator

Kentucky Trust Company
(Danville KY)

Kentucky Trust Company logo

Retirement Plan Consultant

EPIC: TPA/DPS
(Remote / Norwich NY)

EPIC: TPA/DPS logo

Membership Director: Independent Contractor

Retirement Industry Trust Association (RITA)
(Remote / Sarasota FL)

Retirement Industry Trust Association (RITA) logo

Retirement Plan Administrator – Senior Associate

PBMares
(Norfolk VA / AZ / DC / FL / MD / NC / PA / TX)

PBMares logo

Sales Consultant

EPIC Retirement Plan Services
(Remote / Norwich NY / KY / MA / ME / OH / PA / VT)

EPIC Retirement Plan Services logo

Administrator/Consultant (DC and DB)

TPA Professionals
(Remote)

Retirement Plan Administrator (TPA)

Retirement Plan Consultants
(Remote)

Retirement Plan Consultants logo

Legal Director

Pension Rights Center
(Remote)

Pension Rights Center logo

Retirement Plan Documents Specialist

Loren D. Stark Company
(Remote)

Loren D. Stark Company logo

Jr Retirement Plan Administrator/ Administrative Assistant

Hochheiser Deutsch & Co, Inc.
(Melville NY)

Hochheiser Deutsch & Co, Inc. logo

Retirement Plan Administrator

Nicholas Pension Consultants
(Remote / Corona CA / Rancho Cordova CA)

Nicholas Pension Consultants logo

Retirement Plan Administrator

Farmer & Betts, Inc.
(Remote / WA)

Farmer & Betts, Inc. logo

Employee Benefits and Executive Compensation Associate Attorney

Verrill
(Portland ME / Boston MA)

Verrill logo

Distribution \ Loan Clerk

Retirement, LLC
(Remote / Oklahoma City OK)

Retirement, LLC logo

Employee Benefits & Executive Compensation Associate Attorney

Polsinelli PC
(Chicago IL / Dallas TX / Kansas City MO)

Polsinelli PC logo

View More Employee Benefits Jobs

Free Newsletters

“BenefitsLink continues to be the most valuable resource we have at the firm.”

-- An attorney subscriber

Mobile App image LinkedIn icon
Twitter icon
Facebook icon

BenefitsLink > Q&A Columns >

Who's the Employer?

Answers are provided by S. Derrin Watson, JD, APM

Shared Employees

(Posted August 22, 2000)

Question 56: If Dentist Able and Dentist Baker are each sole proprietors, operating in the same office and sharing the staff employees 50/50, can each have his or her own retirement plan, taking into account just his or her share of the staff employees' payroll and hours worked? Please assume there is no entity combining the two sole proprietorships.

Answer: This is a fairly classic shared employee situation. I discuss this at length in Chapter 5 of my book, Who's the Employer?, but here's a quick summary.

The staff members in a shared employee situation, according to some old revenue rulings, work for both dentists. Each dentist must credit each employee with his or her full hours of service. In other words, the receptionist is working 2,000 hours/year for Dentist Able and 2,000 hours/year for Dentist Baker. This position is supported by general common law principles and by reality.

Each dentist credits each employee with the dentist's pro rata share of the employee's compensation. So, each dentist is deemed to have paid the employee half of the employee's salary.

Suppose I'm a billing clerk working there. I work 1,800 hours a year and make $24,000. Able has a 15% profit sharing plan and Baker has a 10% money purchase pension plan. At 1,800 hours, I meet the eligibility requirements for both plans easily. A will put away $1,800 for me, and B will contribute $1,200.


Important notice:

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.


Copyright 1999-2017 S. Derrin Watson
Related links:

(restricted access)

(restricted access)

© 2023 BenefitsLink.com, Inc.