My plan defines compensation as W-2 income. If one of my employees receives a W-2 from me and a W-2 from a third party for "sick pay" do I combine the W-2 totals for purposes of doing ADP and ACP testing? The document does not specify.

If you had disbursed the sick pay, it would have been includable on the employee's W-2, and your plan would have included it as compensation. The insurance company (or other 3rd party) disbursed sick pay on your behalf, I think, and issued the W-2 for compensation "earned" as your employee. I think both W-2's should count.

This seems more clear in a single-employer setting, where the employer pays premiums to the 3rd party to cover the sick pay. In a multiemployer setting, the sick pay is bargained for, and it's harder to argue that the 3rd party is merely an agent for the employer, but it still seems like the sick pay is compensation earned as your employee.

Another example of why NOT to use W-2 pay as the plan's definition of compensation for contribution purposes.