Safe harbor rule
(A) In general
(A)In general#
The requirements of subparagraph (C) of paragraph (2) shall not apply to any line of business if the highly compensated employee percentage with respect to such line of business is—
(i) not less than one-half, and
(ii) not more than twice,
the percentage which highly compensated employees are of all employees of the employer. An employer shall be treated as meeting the requirements of clause (i) if at least 10 percent of all highly compensated employees of the employer perform services solely for such line of business.
(A)(i)#
not less than one-half, and
(A)(ii)#
not more than twice,
(B)Determination may be based on preceding year#
The requirements of subparagraph (A) shall be treated as met with respect to any line of business if such requirements were met with respect to such line of business for the preceding year and if—
(i) no more than a de minimis number of employees were shifted to or from the line of business after the close of the preceding year, or
(ii) the employees shifted to or from the line of business after the close of the preceding year contained a substantially proportional number of highly compensated employees.
(B)(i)#
no more than a de minimis number of employees were shifted to or from the line of business after the close of the preceding year, or
(B)(ii)#
the employees shifted to or from the line of business after the close of the preceding year contained a substantially proportional number of highly compensated employees.