401(K) Match Eligibility Based on Scheduled Hours?

Can a 401(k) plan require its participants to be scheduled to work at least 20 hours a week to receive an employer match? Employees are eligible to enter the plan on their hire date, but I'm wondering whether a plan could restrict the match to only those employees who are scheduled to work at least 20 hours a week.

Maybe, but why?  Seems like a difficult plan to administer.  4 of 5 weeks works greater than 20 hours and then receives match?   And 1 week the don't get match?  Ugh!!  Plus notices each year.  No thanks.

Just give them the match and move on.

My two cents.

A plan can exclude employees by classification, and an employee scheduled to work at least 20 hours a week is a classification.  The plan will have to pass 410(b) coverage testing.  Without getting too technical, there are multiple ways to conduct coverage testing, and most plans start out running the Ratio Test.  At the most fundamental level, the plan would need to allow at least 70% of the NHCEs to participate in the match.

So, yes, it is possible, and it adds another layer of compliance to test.

This is a very high level response, and the details will matter significantly.