Can someone explain how the ADP ACP nondiscrimination test applies when my employer does not contribute anything to the 401K. It's only employee contribution.

The audit determines whether the company is treating its high paid employees and its lower paid employees equally.  Your company failed that test and therefore it isn't allowed to have a retirement plan unless they fix it.  

Here's the IRS article on these audits.

While I appreciate answer that is not my question.  I am asking why my employer is subject to this audit when my employer makes no contribution to the 401K.  There is no company match, there is no company contribution.  Without an employer contribution I do not see how a HCE can gain an advantage therefore the audit make no sense to me.  How am I wrong?

ADP is Actual Deferral Percentage.  Deferrals consist only of employee contributions, so this test does not consider employer contributions and also does not consider employee catch-up contributions.  ACP is Actual Contribution Percentage and considers matching and after-tax traditional contributions.

Why do these tests exist?  Probably so that the potential tax benefits of income deferral or Roth contributions do not disproportionately benefit higher-income individuals.

https://www.irs.gov/retirement-plans/401k-plan-fix-it-guide-the-plan-failed-the-401k-adp-and-acp-nondiscrimination-tests

Thank you.  While I find it absurd that, in my situation, a single employee still making six figures can alter my retirement savings plan by electing to not participate, at least it's an answer.  I may not like it, but there it is.

Thanks again.