Advanced Underwriting Consultants

Question of the Day – August 10

Ask the Experts!

Here’s the question of the day.

Question: I am working with an employer who leases 90% of his workforce from an employment leasing company.  Do these contractors have to be included in the employer’s qualified plan?

Answer: Most likely yes.  Leased staff members that are supervised and controlled by the employer are generally treated as employees for qualified plan purposes.

Here’s an excerpt from IRS Publication 560:

Leased employee. A leased employee … must generally be treated as your employee for retirement plan purposes if he or she does all the following.

  • Provides services to you under an agreement between you and a leasing organization.
  • Has performed services for you (or for you and related persons) substantially full time for at least 1 year.
  • Performs services under your primary direction or control.

Have a question for the professionals at AUC?  Feel welcome to submit it by email.  We may post your question and the answer as the question of the day.