In Home Supported Services (IHSS)

I have client who provides supported services to people in need in California.  Part of the employees hours are billed to the company and part of the employees hours are billed to the government program IHSS.  The government pays the employee directly.  Does the client have to include the government billed hours into the 1,000 hour eligibility calculation?  Lastly, I don't know if this makes a difference but it is a for-profit company.  For the life of me I cannot find anything online that provides guidance and if anyone knows the answer I will be eternally grateful!!!  

I would start be re-reading the document.  Is the definition of hours linked to hours worked AND paid BY the sponsor?   A lot of my plans talk about paid at least. 

If it doesn't clearly say "by the sponsor" I would do the following. 

I would also make sure your plan has the standard language that says the Plan Administrator (PA) is allowed to make reasonable interpretations of the plan document in a non-discriminatory manner. 

I would then see if people are comfortable with the PA saying a reasonable interpretation of the document is hours are worked and paid by the sponsor.  That does seem like the natural reading of the plan document. 

I have never researched this specific question but off the top of my head I doubt you will find a clear cite on something like this. 

This is merely my reaction to the question nothing authoritative. 

I recommend you speak to a lawyer.  When you say part of the employees hours are billed to the company and part are billed to the government, who is doing the billing?  For whom are the employees performing services.  

ESOP guy, I would not rely on a reasonable interpretation of the plan document, and by that I mean don't rely on judicial deference of a discretionary interpretation.  I'm not sure you are saying that, but just in case you are I thought I would mention this.  The plan document is required to follow the definition of hours of service in the ERISA regs.  If the interpretation of the plan document is not consistent with the law, the courts would not defer to the fiduciary's interpretation.  That would be a de novo review.   Of course, if you are dealing with hours of service that exceed the minimum requirements of the law, then that could be a matter of interpretation that would be given deference by the courts.  That does not seem to be the case here.  

I'm not an employment attorney and it sounds like you may need to talk to one to get a determination.

That said to me it sounds somewhat analogous to a co-employment situation where the employee in that case would be credited with the full hours worked by both employers with each employer.

How are the government payments made?  Does the individual get a W-2 from the government for those amounts? A 1099?

I would also want to review the actual contract with the government (or if no contract, the terms of the program which are most likely in writing).  There may be very clear language in there as to whether the provider is considered an employee of your client even for the hours worked but paid for the government.  For example, for those hours, does your client cover the Workers Comp (are very telling fact)? 

I'm willing to bet that the employee's hours (at a minimum) count, and probably the compensation as well.

Let us know if you can get any specifics from the government contract/program that would clarify.

Thank you all so much!  I'll try to get additional information and keep you updated on my findings.  

-Jennie