Under the final regulations, how is it determined that an employee normally works fewer than 20 hours per week?
Under the final regulations, an employee normally works fewer than 20 hours per week if: • At the employee’s hire date, the employer “reasonably expects” the employee to work less than 1,000 hours by his or her one (1)-year anniversary; and, • For each plan year (or subsequent 12-month period, if provided in the plan) ending after the employee’s one-year anniversary, the employee actually worked fewer than 1,000 hours in the preceding 12-month period. It appears that once an employee works 1,000 or more hours in a year, that employee is in the plan. However, GuideStone and others are seeking clarification of this issue. This may be the first time that employers have to look at employees in this category and track hours worked. However, the IRS does not appear to be flexible on this matter and is requiring counting of hours worked even for those plans that use an elapsed-time method rather than counting hours for plan purposes. Alert for 2008: Employers should also be aware that even th
