eligibility for PRN ("as needed") employee

SH 401(k) plan (SH NEC), two entry dates (Jan-July), eligibility is age 21, 1,000 hours; plan is top heavy.
Employee hired 6/8/2020, worked 986 hours in 2020. Employee worked 300 hours in 2021 before stopping full-time work 5/21/2021 (so over 1,000 hours in first 11 months).
Employee was then available on as-needed basis.  Employee worked 156 hours between 8/5/21 and end of year. (total hours worked in 2021 was 456 hours)
Did this employee enter the plan? She had 1,000 hours in first 12 months but was not there on the entry date although she was available "as needed".

Is she entitled to any contribution for 2021 (such as SH)? What about top heavy?

Thanks!

Check the plan document for language describing Participation upon Re-employment.  My guess is the employee was eligible in 2021 possibly on 8/5/2021... but this as-needed basis is going to muddy up the conversation.

You can research Service Spanning Rules also for information regarding entry date.

Hope this helps.

There may or may not have been a termination of employment but whether the person enters on 7/1 or 8/5 doesn't matter as TH based on full year pay unless considered terminated (again?) before PYE. Employer should make the determination - was person terminated in payroll system, did person's other employment-related benefits stop, was the person offered COBRA? Reductions in hours, working on an as-needed/on-call/per diem basis is generally not a termination, in my opinion. Otherwise, I think you put yourself in position of tracking a string of hire and term dates for each temporary stint, two weeks here, then another week a month later, and so on and dealing with the break-in-service rules - which I have seen done and it wasn't pretty.

Mr. Bagwell - thanks for the suggestion about plan doc language re participation on re-employment.  The plan document does say that if she did not qualify for participation as of Term date and is subsequently reemployed, she is eligible to participate on the later of re-employment or date eligibility is met.  So I think she is in.

CuseFan - she probably was considered terminated, but no benefits provided - employees can opt to join group health ins plan but not employer-paid.  Almost immediately after leaving she offered to work as "fill-in" so not really terminated, just switch to "as needed".  I think she will get the TH contribution.

Thanks for responses!

29 minutes ago, M Norton said:

CuseFan - she probably was considered terminated, but no benefits provided - employees can opt to join group health ins plan but not employer-paid.  Almost immediately after leaving she offered to work as "fill-in" so not really terminated, just switch to "as needed".  I think she will get the TH contribution.

Now you get to have the conversation about if the plan gets to use the SH no TH exclusion.  Single eligibility, only deferrals and safe harbor contributions..... no top heavy required.  And if plan has partial plan compensation, the SH NEC is only on the 156 hours of compensation.