Compensation when deferral feature added mid-year

We have a plan that was established 1/1/2020.  It allows prevailing wage and profit sharing contributions as of 1/1 but the effective date of the deferral provision is 4/1/2020.  Should the compensation used for the ADP test be for the time period the deferral was effective, so 4/1 - 12/31/2020?  We normally use prevailing wage as a QNEC in the ADP test so it seemed like we would need to use full year compensation if we used the QNEC.

Depends on how the plan defines compensation for purposes of ADP/ACP testing. For testing purposes, the 1.401(k)-1(g)(2) Treasury Regulations allow (but do not require) the plan to exclude compensation for the part of the year that the employee is not eligible to participate.  Look to the plan document.

Agree with Former Esq.  The answer is in the plan document.

I also agree.  When we had this situation where 401k deferrals started mid-year, the ERISA attorney who did all plan documents and amendments made clear that SH contributions were based on compensation after 401k deferrals started.

I also agree to look to the plan document.  However, the document might state that one may, but is not required, to use just compensation during the portion of the plan year during which employees are eligible to make elective deferrals.