Highly Compensated Employee (HCE)
Satisfies one or more of the following definitions:
- Someone who owns more than 5% of the company (a " 5 Percent Owner ") at any time during the current year or the preceding year.
- Someone who made more than $100,000 during the preceding year ($100,000 is the Cola Indexed level used to test 2006 compensation for use in determining 2007 HCE status).
It is possible to limit the number of HCEs to the top-paid 20% of the work force. 5 Percent Owners must always be counted as HCEs.
The status of HCE vs. Non-Highly Compensated Employees (NHCEs) is used in Nondiscrimination Testing.
See also Comparison Of Key And Highly Compensated Employees
Non-Highly Compensated Employee