Highly Compensated Employee Definition 2024. The final rule will increase the standard salary level and the highly compensated employee total annual compensation threshold on the rule’s effective date on july 1, 2024, and on january 1, 2025, when changes in the methodologies used to calculate these levels become applicable. Hces are typically executives, managers, or other highly skilled or specialized employees who earn a higher income than other employees within their company.
The threshold for determining who is a highly compensated employee under section 414(q)(1)(b) increases to $155,000 (from $150,000). Highly compensated employees (hces) are employees who earn more than the irs maximum allowable compensation for a 401 (k) of $155,000 ($150,000 for.
What Are Highly Compensated Employees?
Defining highly compensated employees (hces) the irs defines a highly compensated employee as someone who meets either of the following criteria :
A Highly Compensated Employee Is Deemed Exempt Under Section 13 (A) (1) If:
The employee must earn a total annual compensation of at least $107,432, which must include at least $684 a week paid on a salary or fee basis.
The regulations contain a special rule for “highly compensated” employees who are paid total annual compensation of $107,432 or more.
Under The Federal Fair Labor Standards Act (Flsa), Employees Generally Must Be Paid An Overtime Premium Of 1.5 Times Their Regular Rate Of Pay For All Hours.
A highly compensated employee is deemed exempt under section 13 (a) (1) if: