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Who is considered a "long-term part-time" employee?

Long-term, part-time employees are defined as those employees working at least 500 hours, but less than 1,000 hours for three consecutive plan years.

My plan requires one year of service with 1000 hours for participation. Does this change affect my plan?

It may. If you have employees who meet the long-term, part-time employee requirements, you must allow them to participate in the deferral portion of your plan.

We hire seasonal employees during our busy season or the holidays. Do these employees count?

Yes. Make sure to include all hired employees and their hours in your annual census, regardless of their full-time or part-time status.

A good rule of thumb is to have your census match your W-2s for the year. If you are only providing full time employees on your census or including only those employees deferring on your payroll files, you may want to review further for those employees who are seasonal or part-time not normally included.

Do I have to go back to old payroll records to see how this affects my plan?

You do not have to go back any further than 2021 records, as the calculation period begins January 1, 2021. You can begin your review as you prepare your 2021 census.

Do I have any other options if I do not want to manually track these employees?

Yes. We can amend your plan to remove the hours requirement while keeping your service requirement of 12 months. Alternatively, we can amend your plan to shorten your service requirement; i.e., one month, three months, or six months. We will not charge you for a plan amendment due to this legislation.

What happens if I leave this provision in my plan?

Ubiquity is currently working on a solution to track long-term, part-time employees in our software. Until this functionality is in place, you will be required to track your part-time employees’ hours separately and categorize them as “long-term, part-time” employees beginning in 2021.

Where can I access more information about this legislation?

Click here for more information on the legislation and how this will affect your plan.