Employees who are barred from participation due to their job classification are considered what type of employees?

When employees are barred from participating in a 401(k) plan because of their job classification, they are referred to as "excluded" employees. This term specifically denotes those who do not meet the necessary criteria for participation as defined by the plan, which may include certain job classifications or employment status.

The distinction of being "excluded" aligns with regulatory frameworks that allow employers to set specific employment criteria affecting eligibility for retirement plans. For example, certain part-time or seasonal workers may be excluded based on their job classification.

Using the term "excluded" indicates that these employees are not just failing to enroll; rather, they are actively barred from participation due to specific criteria outlined in the plan documents. This contrasts with terms like "ineligible," which may imply a broader category of individuals who do not qualify under different circumstances. Therefore, "excluded" is the most precise term for this situation.