When a person has been reclassified as a temporary employee, thus they are no longer eligible for company benefits which includes not be eligible to receive the company's payment of 401K contributions, can they withdraw from 401k plan participation and rollover their 401k funds into a roth ira? The 401k plan administrator says that since the newly classified temp employee can not withdraw since they are not 59.5 years of age. If the plan administrator any information citations or references would be greatly appreciated.

Your plan document should specify distributable events. Also see §401(k)(2)(B) for restrictions on distributions of 401(k) contributions.

I am always leary of the term "temporary employee". What does it really mean? If the employee is really temporary he/she won't be employed too much longer and can probably take a distribution upon termination of employment (but always check the document). From the limited situation you describe, I'm guessing the administrator is correct and the employee isn't entitled to a distribution.

Reminder: One cannot roll money directly from a qualified plan to a ROTH IRA.

From IRS Notice 2002-3: "Your payment cannot be rolled over to a Roth IRA, a SIMPLE IRA, or a Coverdell Education Savings Account (formerly known as an education IRA)"