Temporary foreign workers - allowable exclusions?

We don't get this issue much here in the Northeast. An employer (not agricultural) is apparently hiring some foreign workers under some program (name/number of program as yet unknown, other than it is not H-2A). Wants to exclude them as a class, subject to coverage testing.

Although this is a labor lawyer question, any thoughts as to whether it is generally allowable to exclude, as a class, foreign workers under various work/Visa programs, again, subject to coverage testing?

P.S. - it appears that all of these workers will be from Mexico. It seems to me that an exclusion that has the effect of excluding only employees of one nationality would be a violation of some discrimination regulations.

5 hours ago, Belgarath said:

We don't get this issue much here in the Northeast. An employer (not agricultural) is apparently hiring some foreign workers under some program (name/number of program as yet unknown, other than it is not H-2A). Wants to exclude them as a class, subject to coverage testing.

Although this is a labor lawyer question, any thoughts as to whether it is generally allowable to exclude, as a class, foreign workers under various work/Visa programs, again, subject to coverage testing?

P.S. - it appears that all of these workers will be from Mexico. It seems to me that an exclusion that has the effect of excluding only employees of one nationality would be a violation of some discrimination regulations.

Exclude them as temporary employees?  Something like employees hired on a non-permanent basis.  Maybe with a failsafe to let them in if they complete a year of service?

Will the visa-program workers live in the USA? Or elsewhere? Or some of both?

Will the visa-program workers perform services in the USA? Or elsewhere? Or some of both?

Any reasonable classification is fine from the plan perspective but I can see your general labor law discrimination concerns. I would find out the specific name of the program and use that as the exclusion. Even if it only includes one nationality I don't think you have an issue. If these employees become permanent and "graduate" from that program, then they join the eligible class and would likely participate immediately based on their prior service which could not be discounted.

First, thanks for the comments.

Peter, they will live and work in the USA. RBG, they work over 1,000 hours. 'Cuse - I get your point, but since this is an area about which I know essentially nothing, it requires legal counsel to be safe - I certainly wouldn't take this approach without blessing of counsel. I probably would never have even thought about this issue except that a couple of years back, a somewhat related question came up specifically regarding H-2A employees, and client's legal counsel opined that they could not be excluded by class.

Anyway, it turns out that this is a tempest in a teapot. Employer has 1 YOS eligibility, and a 1,000 hour/last day allocation requirement, 6-year graded vesting, and almost all of these people leave before the end of the second year, so even if they fail coverage and have to make contributions for half a dozen of them, they will either be zero or 20% vested. Employer is not a "generous" type, so that's how this came up.

Belgarath, you’re right that a question of this kind (if not solved by recognizing that the pattern of the visa workers’ employment will make an exclusion practically unnecessary) involves law beyond what’s comfortable for most retirement-plans practitioners, even really smart ones like you.

You spotted the issue: An exclusion that fits ERISA participation rules and comports with tax law coverage and nondiscrimination rules might nonetheless violate one or more Federal or State civil-rights or employment laws.

Further, an incautious exclusion could violate the conditions of a visa or work permit, or violate other immigration law.

The next time you see a question of this kind, tell the employer you can help much more efficiently if you know which visa or work-permit program the employer relies on. For the employment law firms I’m counsel to, we’ve been able to design an exclusion or otherwise solve these needs in as little as one tenth of an hour if we know which program the employer relies on. And you too could solve one if you can look up the terms of the program involved.

CuseFan is right that it often fits to specify an exclusion by the name of the immigration program under which the employer is permitted to hire the workers otherwise ineligible to work in the United States.

Peter - I thank you for the compliment. Very classy and kind, even though demonstrably untrue...

I did initially ask for the name/number of the program, but as yet have not received a reply. In this case, it turns out that it is unlikely to matter much anyway. It is good to know, however, that if it ever comes up on a case that matters, we can refer the client to you. Sadly, most of them are too cheap to engage counsel in about 98% of the situations where we recommend that they do. Pennywise and pound foolish. Or, as we salt mine slaves at a prior large employer used to say of the management bean counters, "They'll step over a $20 to pick up a $1."