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PHR · Question #78
PHR Question #78: Real Exam Question with Answer & Explanation
The correct answer is C. $100,000 or more. Under the FLSA FairPay overtime exemption rules, a highly compensated employee (HCE) is defined as one earning a total annual compensation of $100,000 or more.
Question
What is the FairPay amount that defines, what a person makes, to be considered highly compensated?
Options
- A$110,000 or more
- B$150,000 or more
- C$100,000 or more
- D$125,000 or more
Explanation
Under the FLSA FairPay overtime exemption rules, a highly compensated employee (HCE) is defined as one earning a total annual compensation of $100,000 or more.
Common mistakes.
- A. $110,000 does not correspond to any HCE threshold defined in the original FairPay overtime regulations and is not a figure established by that rule.
- B. $150,000 is not the FairPay-defined threshold; while later regulatory updates have raised the HCE threshold, the original FairPay rule specifically set it at $100,000.
- D. $125,000 is not the FairPay threshold for highly compensated employees and does not correspond to the HCE salary level established in the original FairPay regulations.
Concept tested. FLSA FairPay highly compensated employee exemption threshold
Reference. https://www.dol.gov/agencies/whd/overtime
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