We used to call them “rehires” back in the day: those employees who quit and were hired back. And it didn’t happen all that often. Many companies had policies not to. But now it’s different. Different times, different economy. Employees who left the nest decide they want to come back, and employers desperate for qualified, talented workers are happy to have them back.

They’re now called “boomerang workers”, and according to Benefit News they comprise about one-third of the workforce Steve Jobs at Apple Computing is one of them, and they’re not just confined to the tech companies.

We’ve seen a number of these boomerang employees return to clients who have to deal with 401(k) issues such as eligibility, vesting, and forfeitures. It means picking up the plan document and reviewing those complicated rules to determine how to handle such ERISA matters as break-in-service, eligibility computation period, forfeiture, hour of service, vesting computation period, rule of parity, and year of service.

If you’re an employer rehiring former employees, here are some things to keep in mind:

  • Make sure that your plan and your Summary Plan Description clearly spell out how returning workers are treated. It’s ERISA, and everyone has to be treated the same.
  • Review how their vesting and forfeitures were handled when they left. Those same ERISA rules govern how non-vested benefits should be treated when an employee returns.
  • Use the appropriate eligibility rules to bring these employees back into your 401(k) plan. Those ERISA rules referenced above may – or may not – allow them to come in immediately.
  • Keep the recent changes to the Pension Protection Act in mind. The Act made changes to vesting schedules that may affect these employees.

And, of course, know how to handle the situation before – rather than after – the rehire.