Excluded employee allowed to participate

Pre-approved plan document. Safe harbor nonelective. Eligibility is a checkbox which is for BOTH deferral and safe harbor. Per diem employees excluded.

NHC per diem was allowed to defer.

For correction, if it was under VCP, I'd comfortable at least ASKING to retroactively amend to allow the deferrals only, even though the IRS might reject it. But for self-correction, I don't see it as a valid choice - you are retroactively amending and waiving the exclusion, and therefore I think it has to be the full Monty. Any thoughts?

Only one NHC, and not worth the cost to file VCP anyway. 

It might be too hard even to think about a question like this. The expense for even a short bit of a professional’s time to consider even a partially reasoned course of action might be horribly disproportionate to the probability-discounted risk exposure.

This is not advice to anyone.

Exactly. "Sorry, you should not have been allowed to participate and contribute. Here are you deferrals and attributable income back, any employer contributions we've made for you will be forfeited." I'd be shocked if your (pre-approved) plan document did not support that course of action. 

Right.  This is a simple failure to follow the terms of the plan.  self-correct as @CuseFan suggests.  You are seriously considering going to VCP to amend the plan for per diem employees that the client likely doesn't want to include anyways?  Can't SCP because this person was let in early and is not "otherwise eligible".