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Eligibility Plan B has a three-month eligibilty period before an employee can enter the plan. If an employee leaves after only two months of service and is then rehired four months later, does the employee have to work one month or three months from the rehire date to satisfy Plan B's eligibility requirement? (See example 1 for the answer. Example 2 and 3 provide additional scenarios.) Rev. 08/19/04 E-mail Alert 2004-17 Example 1 Employee A Hired April 1, 2004 Terminated service June 1, 2004 Rehired March 1, 2005 The rehired employee is immediately eligible on March 1, 2005. When using an eligibility requirement of less than 1 year of service(for example, 3 months, with no specific hours requirement), it is administered as if the plan selected the elapsed time method. Under that method, periods of time where no work is performed are counted in the service calculation as long as the individual has not incurred a 12-month “Period of Severance” between the time of their first absence from employment and his/her rehire. Note: There is no requirement that the rehired employee work an additional month to satisfy the service requirement as he/she is deemed to have been employed from his original hire date through his rehire date. Example 2 Employee B Hired April 1, 2004 Terminated service June 1, 2004 Rehired August 1, 2005. The rehired employee must complete three months of service as if he/she were a new employee with a hire date of August 1,2005. This is because the employee did not satisfy the service requirement before terminating and a 12-month “Period of Severance” occurred, between the time of the termination of service and the rehire date. (Since it was before the eligibility was satisfied, the 3 month eligibility must be satisfied the same as a new hire starting as of August 1, 2005.) Example 3 Employee C Hired April 1, 2004 Terminated service June 1, 2004 Rehired May 1, 2005. Would the employee be immediately eligible on May 1, 2005? Yes, as in example 1, a 12-month “Period of Severance” has not occurred.
To learn more, call 973-492-1880 or e-mail info@mhco.com. © 2012, McKay Hochman Co., Inc. All rights reserved. |
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