FAQs About Retained Workers
(07/23/10) Q1: Is the requirement that a retained worker remain an employee for at least 52 consecutive weeks relevant only for purposes of the new hire retention credit?
A1: Yes, the 52-week requirement is used to determine eligibility for the new hire retention credit. It is not a requirement for the payroll tax exemption.
(07/23/10) Q2: When does the period start for determining whether a qualified employee has been employed for at least 52 consecutive weeks?
A2: The period for determining whether a qualified employee has been employed for at least 52 consecutive weeks starts on the date the employee begins employment with the employer. Refer to QE17 on FAQs About Qualified Employees.
(07/23/10) Q3: Does an employee have to work during the entire 52 consecutive week period in order to qualify as a retained worker? For example, does unpaid vacation time or sick leave count for purposes of the 52 weeks?
A3: In order to be a retained worker, the qualified employee must be employed by the employer for a period of not less than 52 consecutive weeks. Whether a qualified employee is employed for 52 consecutive weeks depends on the facts and circumstances.
As long as the employment relationship is not terminated during the 52 consecutive weeks and the wages paid to the qualified employee for the last 26 weeks of the 52-week period equal at least 80 percent of the wages paid to the employee for the first 26 weeks, the employee will be a retained worker even if he or she is not performing services the entire time.