Transitioning To The New "Highly Compensated" Threshold

When the revised requirements for the federal Fair Labor Standards Act's "white collar" exemptions take effect on December 1, the total-annual-compensation threshold for the "highly compensated employee" (HCE) versions will increase from $100,000 to $134,004.  This raises the question of what actual total annual dollar amount will be necessary for the transition period, that is, for the timeframe in which the change occurs.

The U.S. Labor Department has not yet provided authoritative guidance on this point.  But the answer is likely to depend in part upon what period an employer has selected for measuring "total annual compensation".

"Annual" Means What, Exactly?

The HCE regulations permit the employer to select in advance "any 52-week period" as the relevant year, such as a calendar year, a fiscal year, or a hiring-anniversary year.  A calendar year applies by default if the employer does not identify some other year.  29 C.F.R. § 541.601(b)(4).