There are a number of "safe harbor" provisions that can allow a company to be exempted from the ADP test. This includes making a "safe harbor" employer contribution to employees' accounts. Safe harbor contributions can take the form of a match (generally totaling 4% of pay) or a non-elective profit sharing (totaling 3% of pay). Safe harbor 401(k) contributions must be 100% vested at all times with immediate eligibility for employees. There are other administrative requirements within the safe harbor, such as requiring the employer to notify all eligible employees of the opportunity to participate in the plan, and restricting the employer from suspending participants for any reason other than due to a hardship withdrawal.
there are a number of "safe harbor" provisions that can allow a company to be exempted from the adp test this includes making a "safe harbor" employer contribution to employees' accounts safe harbor contributions can take the form of a match (generally totaling 4% of pay) or a non-elective profit sharing (totaling 3% of pay) safe harbor 401(k) contributions must be 100% vested at all times with immediate eligibility for employees there are other administrative requirements within the safe harbor such as requiring the employer to notify all eligible employees of the opportunity to participate in the plan and restricting the employer from suspending participants for any reason other than due to a hardship withdrawal