29 C.F.R. § 541.601

Highly compensated employees

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(a)(1) Beginning on January 1, 2020, an employee with total annual compensation of at least $107,432 is deemed exempt under section 13(a)(1) of the Act if the employee customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee as identified in subparts B, C or D of this part.

(2) Where the annual period covers periods both prior to and after January 1, 2020, the amount of total annual compensation due will be determined on a proportional basis.

(b)(1) “Total annual compensation” must include at least $684 per week paid on a salary or fee basis as set forth in §§ 541.602 and 541.605, except that § 541.602(a)(3) shall not apply to highly compensated employees. Total annual compensation may also include commissions, nondiscretionary bonuses and other nondiscretionary compensation earned during a 52-week period. Total annual compensation does not include board, lodging and other facilities as defined in § 541.606, and does not include payments for medical insurance, payments for life insurance, contributions to retirement plans and the cost of other fringe benefits.

(2) If an employee's total annual compensation does not total at least the amount specified in the applicable subsection of paragraph (a) by the last pay period of the 52-week period, the employer may, during the last pay period or within one month after the end of the 52-week period, make one final payment sufficient to achieve the required level. For example, for a 52-week period beginning January 1, 2020, an employee may earn $90,000 in base salary, and the employer may anticipate based upon past sales that the employee also will earn $17,432 in commissions. However, due to poor sales in the final quarter of the year, the employee actually only earns $12,000 in commissions. In this situation, the employer may within one month after the end of the year make a payment of at least $5,432 to the employee. Any such final payment made after the end of the 52-week period may count only toward the prior year's total annual compensation and not toward the total annual compensation in the year it was paid. If the employer fails to make such a payment, the employee does not qualify as a highly compensated employee, but may still qualify as exempt under subparts B, C, or D of this part.

(3) An employee who does not work a full year for the employer, either because the employee is newly hired after the beginning of the year or ends the employment before the end of the year, may qualify for exemption under this section if the employee receives a pro rata portion of the minimum amount established in paragraph (a) of this section, based upon the number of weeks that the employee will be or has been employed. An employer may make one final payment as under paragraph (b)(2) of this section within one month after the end of employment.

(4) The employer may utilize any 52-week period as the year, such as a calendar year, a fiscal year, or an anniversary of hire year. If the employer does not identify some other year period in advance, the calendar year will apply.

(c) A high level of compensation is a strong indicator of an employee's exempt status, thus eliminating the need for a detailed analysis of the employee's job duties. Thus, a highly compensated employee will qualify for exemption if the employee customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee identified in subparts B, C or D of this part. An employee may qualify as a highly compensated executive employee, for example, if the employee customarily and regularly directs the work of two or more other employees, even though the employee does not meet all of the other requirements for the executive exemption under § 541.100.

(d) This section applies only to employees whose primary duty includes performing office or non-manual work. Thus, for example, non-management production-line workers and non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers, laborers and other employees who perform work involving repetitive operations with their hands, physical skill and energy are not exempt under this section no matter how highly paid they might be.

[69 FR 22260, Apr. 23, 2004, as amended at 81 FR 32550, May 23, 2016; 84 FR 51307, Sept. 27, 2019; 85 FR 34969, June 8, 2020; 89 FR 32972, Apr. 26, 2024; 91 FR 27836, May 15, 2026]

Notes of Decisions

Cited in 127 cases (60 in the last 5 years), 2005–2026 · leading case: Hewitt v. Helix Engy Solutions Grp, 15 F.4th 289 (5th Cir. 2021).

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Hewitt v. Helix Engy Solutions Grp, 15 F.4th 289 (5th Cir. 2021). · cites it 8× “See 29 C.F.R. § 541.601 . To prevail, however, Helix must show that it paid Hewitt on a “salary basis” as defined by the regulations.”

Allen v. Coil Tubing Servs., L.L.C., 846 F. Supp. 2d 678 (S.D. Tex. 2012). · cites it 7× “29 C.F.R. § 541.601 (a), (b)(1); see also In re Novartis Wage and Hour Litigation, 611 F.”

Helix Energy Solutions Grp., Inc. v. Hewitt, 598 U.S. 39 (2023). · cites it 3× “The Court granted certiorari to answer this question: “Whether a supervisor making over $200,000 each year is entitled to overtime pay because the standalone regulatory exemption set forth in 29 C.F.R. § 541.601 remains subject to the detailed requirements of 29 C.”

Hobbs v. EVO, 7 F.4th 241 (5th Cir. 2021). · cites it 4× “Exemption for Highly Compensated Employees On appeal, as below, EVO contends that three Plaintiffs—Hobbs, Lee, and Jones—are highly compensated employees exempt from the FLSA’s overtime requirements per 29 C.F.R. § 541.601 . To qualify for the Highly Compensated Employee (HCE)…”

Litz v. Saint Consulting Grp., Inc., 772 F.3d 1 (1st Cir. 2014). · cites it 3× “§ 213 (a)(1); 29 C.F.R. § 541.601 . For the following reasons, we affirm.”

Sarviss v. Gen. Dynamics Info. Tech., Inc., 663 F. Supp. 2d 883 (C.D. Cal. 2009). · cites it 6× “” 29 C.F.R. § 541.601 (c). To fall within this exemption (the requirements of which the parties do not dispute), an employee must (1) have a “total annual compensation of at least 100,-000,” id.”

Michael Hewitt v. Helix Energy Solutions Grp., et, 983 F.3d 789 (5th Cir. 2020). · cites it 5× “”); see generally 29 C.F.R. § 541.601 (c). 4 Case: 19-20023 Document: 00515681284 Page: 5 Date Filed: 12/21/2020 No.”

Susie Bigger v. Facebook, Inc., 947 F.3d 1043 (7th Cir. 2020). “” 29 C.F.R. § 541.601 (a). The rationale for this highly-compen- sated-employee test is that “[a] high level of compensation is a strong indicator of an employee’s exempt status, thus elim- inating the need for a detailed analysis of the employee’s job duties.”

Daniel Smith v. Ochsner Health Sys., 956 F.3d 681 (5th Cir. 2020). · cites it 2× “An employee is exempt under the highly compensated category if he or she (1) is annually compensated at least $100,000; 1 (2) “customarily and 1 The compensation requirements under 29 C.F.R. § 541.601 have gone through multiple changes over the past few years, the most recent of…”

Anani v. Cvs Rx Servs., Inc., 788 F. Supp. 2d 55 (E.D.N.Y 2011). · cites it 4× “300 , and as an exempt “highly compensated employee”, see 29 C.F.R. § 541.601 . In order to meet the criteria for the “professional” exemption, an employee must satisfy both a “salary basis test” and a “duties test.”

Amendola v. Bristol-Myers Squibb Co., 558 F. Supp. 2d 459 (S.D.N.Y. 2008). · cites it 2× “” 21 29 C.F.R. § 541.601 (a). Total compensation may “include commissions, nondiscretionary bonuses and other nondiscretionary compensation.”

Hughes v. Gulf Interstate Field Servs., Inc., 878 F.3d 183 (6th Cir. 2017). · cites it 2× “601 , an employee qualifies as an exempt “[h]ighly compensated employee[]” if three tests are met: “(1) a duties test; (2) a salary-level test; and (3) a salary-basis test.” Orton, 668 F.3d at 846 . The duties and salary-level tests are not in question here; the “sole issue” is…”

Show all 127 citing cases →

— 29 C.F.R. § 541.601(a) — 2 cases

Nigg v. U.S. Postal Serv., 829 F. Supp. 2d 889 (C.D. Cal. 2011).

Boudreaux v. Schlumberger Tech Corp (W.D. La. 2022).

— 29 C.F.R. § 541.601(b) — 1 case

Zubair v. EnTech Eng'g P.C., 808 F. Supp. 2d 592 (S.D.N.Y. 2011).

— 29 C.F.R. § 541.601(b)(3) — 1 case

Roshon v. Eagle Rsch. Grp., Inc., 314 F. Supp. 3d 852 (S.D. Ohio 2018).

— 29 C.F.R. § 541.601(d) — 4 cases

Nigg v. U.S. Postal Serv., 829 F. Supp. 2d 889 (C.D. Cal. 2011).

Boudreaux v. Schlumberger Tech Corp (W.D. La. 2022).

Kennedy v. Las Vegas Sands Corp. (D. Nev. 2023).

Yu v. Knighted, LLC (S.D.N.Y. 2019).

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