What is the FLSA exemption rule for highly compensated employees?
Highly Compensated Employees A highly compensated employee is deemed exempt under Section 13(a)(1) if: The employee earns total annual compensation of $107,432 or more, which includes at least $684* per week paid on a salary or fee basis; The employee’s primary duty includes performing office or non-manual work; and.
What requirements needs to be met in order to be classified as a highly compensated employee?
The employee must earn $100,000 or more per year, including at least a $455 weekly salary. The employee must primarily perform office or non-manual work. The employee must regularly perform at least one of the exempt duties of an exempt executive, administrative, or professional employee.
What is considered a highly compensated employee for 2019?
The IRS defines a highly compensated employee as someone who meets either of the two following criteria: Received $130,000 or more in compensation from the employer that sponsors his or her 401(k) plan in the previous year.
What qualifies as highly compensated?
Key Takeaways. A highly compensated employee is defined as an employee that owns more than 5% of the interest in a business at any time during the year or the preceding year.
What salary is considered highly compensated?
To qualify for exemption, employees must meet certain tests regarding their job duties and be paid on a salary basis at not less than $684* per week. The regulations contain a special rule for “highly compensated” employees who are paid total annual compensation of $107,432 or more.
What is highly compensated employee 2021?
4 For the 2022 plan year, an employee who earns more than $130,000 in 2021 is an HCE. For the 2023 plan year, an employee who earns more than $135,000 in 2022 is an HCE.
What is highly compensated employees threshold for nondiscrimination testing?
For 2020, an HCE is defined as an individual that meets one of the following criteria: They own more than 5% of the employer (either directly or by family attribution) at any time during 2019 or 2020. They received more than $125,000 in compensation from the employer during 2019.
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