FMLA and Last Day Requirement

I've just never come across this.  If a participant works over 1,000 hours during the Plan Year but is on FMLA at the end of the year, does that still qualify them as being employed as of the last day of the Plan Year and therefore eligible for a Profit Sharing Contribution?

My gut is the answer is yes, I just wanted to confirm.

Thanks!

I agree. If you Google "is a person on leave considered employed" you'll get their AI Overview and a lot of snippets, all of the opinion that such a person is still considered employed. If the only choices are employed or terminated, then clearly the answer is employed. However, be sure that the plan document does not otherwise address this in some other fashion.

If there is an ambiguity about what the plan provides, an administrator might prefer an interpretation that’s logically consistent with not only ERISA’s title I but also other Federal laws, including the Family and Medical Leave Act of 1993 if it applies.

“With respect to pension and other retirement plans, any period of unpaid FMLA leave shall not be treated as or counted toward a break in service for purposes of vesting and eligibility to participate. Also, if the plan requires an employee to be employed on a specific date in order to be credited with a year of service for vesting, contributions or participation purposes, an employee on unpaid FMLA leave on that date shall be deemed to have been employed on that date. However, unpaid FMLA leave periods need not be treated as credited service for purposes of benefit accrual, vesting and eligibility to participate.”

29 C.F.R. § 825.215(d)(4) https://www.ecfr.gov/current/title-29/part-825/section-825.215#p-825.215(d)(4).

This is not advice to anyone.