Part Time Employees

Starting in 2021, we need to track hours for employees that work under 1,000 hours.  Historically, these people could be excluded from 401(k) plans. 

However, the law was changed and employees who work 500 hours in 3 cosecutive years after 2020 will now need to be able to defer into the 401(k) plan. There is current proposed legislation that will reduce that to 2 years. 

Both versions will first impact the 2024 year.  And the good news for many employers is that they do not need to make any employer contribution for the—but of course that could change before 2024.