TN 23 (06-10)

A. Definitions of class of employees, payment or dependents, used by an employer to establish a plan

1. Class of Employees is a group of employees having one or more common characteristics, such as salaried, clerical employees in a particular plant or division, or employees in a given wage classification.

2. Payment is an amount paid by an employer for insurance, an annuity, or into a fund to provide for payments.

3. Dependents are the employee's spouse, children, or any other members of the employee's immediate family.

B. Policy to establish a plan

1. Requirements for a Plan

A plan must:

• provide for employees generally (with or without their dependents), or

• a class or classes of employees (with or without their dependents),

• provide payments to or on behalf of an employee or any of the dependents.

• assure employee awareness; i.e, the terms and conditions must be communicated directly or indirectly (via a bulletin board, e-mail or similar method the employer customarily uses) to all employees or the class affected.

• contain definite payment eligibility standards which may include length of service, salary, classification, or occupation and may not be based solely on need, efficiency, or loyalty.

• contain a formula for determining the minimum benefit amount for each eligible employee.

• specify the minimum period of payments, i.e payments will be made for the duration of the employee’s illness, or as long as the employment relationship continues.

2. Deeming Payments to be Under a Plan

If a plan provides that the employer may, at his/her discretion, make payments for a period longer than specified and/ or in addition to the minimum amounts specified in the plan, such payments will be deemed paid under the plan.

3. Plan Adopted After Payments Started

Only payments made after the effective date the plan is adopted are excluded from wages.