Enterprise Onboarding: Eligibility Profile based allocation

Summary

How can we make the Eligibility profiles look at Retired/Inactive Employees as "Non Employee" records

Content

We learnt that in an eligibility profile based Checklist allocation, if the eligibility profile is pointing to a Person type of "Employee", even for records which are Not active employees (for ex: returning employees/rehires), the system in it's understanding, looks as them as records with a Person Type of "Employee" and considers them eligible for the Checklist.
Has anyone run into this problem ?
If yes, how do we craft an eligibility profile to look at the record as an Inactive Employee and not consider them eligible ?