Eligibility - Hours per Month Requirement

A plan has an eligibility requirement that a participant must work 6 moths with 150 hours in each month in order to become eligible for the Profit Sharing source?

Eligibility computation period is defined as anniversary year for the first year and then it switches to the calendar year.

We have a participant who was hired a few years ago and worked around 500 hours per year, then was terminated and re-hired multiple times over the years.

We count all years after a break in service.

For eligibility determination, which option is correct:

1) We determine if the employee is eligible (worked 6 months with 150 hours in each month) for each eligibility computation period. So, if the employee did not work 6 months with 150 hours from date of hire to anniversary date, we switch to calendar year and determine if she worked 6 months with 150 hours during that calendar year, etc.

2) We determine if she ever worked 6 months with 150 hours (at any point since being employed).

I believe option 1 is correct since the eligibility computation period is the 12 month period.

Do you agree?

Thanks!

Working 6 months with 150 hours in each month is 900 hours. So, you require 900 hours in 6 months? Does your plan have a failsafe that regardless of this eligibility criteria, if the employee works 1000 hours in 12 months of service, they enter the plan on the next following entry date? 

Yes, it does have that failsafe. However, this employee never worked 1,000 hours in a year of service.

Thanks.

Terrific! Option one. 

Check the plan document's rules for determining the employee's eligibility computation period after incurring a break in service.  Some plans shift the eligibility computation period for the employee's first ECP following rehire to start with the employee's rehire date.

Also check the plan document's definition of month.  Some plans count only whole calendar months, or consider the 6 month anniversary of the hire date, or have some other quirky rules.

These rules may not change the employee's status as ineligible, but the employee's work history may result in their being eligible. We have seen stranger things happen.

Of course, long-term part-time eligibility would be a separate discussion.

Can a plan require 150 hrs in a month? I thought it was limited to 83.33.