Highly Compensated Employees NJ
Oftentimes, issues arise between employers and highly paid employees that require the latter to receive certain benefits. The Law Office of Benjamin Friedman has broad experience representing highly compensated employees caught up in different types of employment conflicts.
Litigation of such cases may widely vary from the other cases within employment law. The cases may, for instance, require the involvement of accounting experts and the use of electronic discovery. This is why you need an experienced and competent attorney for representation.
NJ Highly Compensated Employee
Highly compensated employees (HCE) can be defined in three possible ways as follows:
1 HCE earns $115,000 per annum threshold
A highly compensated employee can be defined as an employee who owns over five percent of the company in the preceding or current year. This also refers to the employee who received more than $115,000 in the previous year.
2 HCE owns more than 5 percent of the business
Moreover, highly compensated employees are also certain family members of those owning over five percent based on stock ownership rules. The family member may include the parents, spouse, and children. However, keep in mind that the family members in this case do not include siblings, grandchildren or in-laws.
It is worth noting that ownership could be attributed to several family members. For instance, Becky is not a direct owner, but her father is a three percent owner and her husband a four percent owner. Therefore, Becky is a seven percent owner.
3 HCE is the top 20 percent highest paid
Eligible employees fall into the highly compensated category because of what they earn. In determining which workers fall into this category, the following types of employees in the previous plan year could be excluded:
- Employees with below six months of service
- Part-time employees that work for a period of below 17.5 hours a week
- Seasonal employees that work for a period of six months or less a year
- Employees younger than 21 years old
- Employees covered by a collective bargaining agreement; that is if the plan under test does not offer benefits to the employees and the collective bargaining agreement in question covers at least 90 percent of the employees.
A highly compensated employee is exempt from the overtime and minimum wage rules defined in FLSA (Fair Labor Standards Act). To be eligible for such an exemption, the employee must:
Total Annual Compensation
The employee’s total annual compensation could include, on top of the $455 in weekly salary commissions, several nondiscretionary bonuses plus other nondiscretionary compensation that the employee earned during a period of 52 weeks. However, this does not encompass board, life insurance and medical payments, retirement plan contributions, or what the employee pays for other fringe benefits.
What is a Highly Compensated Employee?
A worker is regarded as a highly compensated exempt employee if their duties entail performing non-manual or office work. Therefore, employees carrying out non-management duties may not be eligible. Examples here include electricians, craftsmen, carpenters, plumbers, laborers, operating engineers, and other employees who carry out manual duties that require the use of hands, use of energy, and physical skill. Therefore, despite how highly paid these employees may be, they are not exempt.
NJ Attorney for Highly Compensated Employees
If you or a loved one falls under the category of HCE (Highly Compensated Employee) and is need of legal representation, contact The Law Office of Benjamin Friedman. Our experienced attorney knows the intricacies of employment law.