auto enrollment required?

My client created an LLC last year and purchased an existing nursing and rehab facility which employs about 40 people. There was no plan in place with the previous employer.

Now they want to adopt a safe harbor 401k to benefit employees this year. Eligibility is one year of service (no credit for service with predecessor employer).

Would this qualify as a 'new business' and thereby be exempt from auto enrollment for 3 years?

FWIW, I would be cautious about treating this as a new business for the 3 year auto enroll exemption.

Even if a new LLC was formed, if it is the same location, same employees, and the same day to day operations, it may look more like a continuation of the old business rather than a brand new startup.

It may also matter how the deal was structured, such as a stock or asset purchase, and whether any controlled group rules apply.