What minimum salary does a highly compensated employee need to earn for exemption eligibility?

What minimum salary does a highly compensated employee need to earn for exemption eligibility?

• A. $50,000 per year
• B. $75,000 per year
• C. $107,432 per year
• D. $90,000 per year

Answer: (C)

The minimum salary threshold for highly compensated employees (HCEs) to qualify for exemption under the Fair Labor Standards Act (FLSA) is set at $107,432 per year. This figure reflects the current standards established by the U.S. Department of Labor, which defines HCEs as those who perform office or non-manual work and earn a total annual compensation of at least this amount. The rationale behind this specific threshold is to distinguish individuals in higher-earning roles who typically possess greater responsibilities and exercise more significant decision-making authority compared to those in lower-paid positions. The HCE exemption is designed to reflect the complexities of modern work environments, ensuring that those in managerial or executive roles are compensated fairly while also delineating boundaries for overtime eligibility. Other salary figures, while relevant in various contexts, do not meet the established guideline for HCEs under federal regulation, thus confirming that $107,432 is the correct requirement for exemption eligibility.

The minimum salary threshold for highly compensated employees (HCEs) to qualify for exemption under the Fair Labor Standards Act (FLSA) is set at $107,432 per year. This figure reflects the current standards established by the U.S. Department of Labor, which defines HCEs as those who perform office or non-manual work and earn a total annual compensation of at least this amount.

The rationale behind this specific threshold is to distinguish individuals in higher-earning roles who typically possess greater responsibilities and exercise more significant decision-making authority compared to those in lower-paid positions. The HCE exemption is designed to reflect the complexities of modern work environments, ensuring that those in managerial or executive roles are compensated fairly while also delineating boundaries for overtime eligibility.

Other salary figures, while relevant in various contexts, do not meet the established guideline for HCEs under federal regulation, thus confirming that $107,432 is the correct requirement for exemption eligibility.