what is considered a highly compensated employee
If an employee makes more than $110,000, she is considered a highly compensated employee. The term highly compensated employee is important because it relates to 401(k) rules. Every 401(k) plan has to be weighted equally among all of the employees. If only the highly compensated employees in the company are contributing to the 401(k), it will be considered uneven, and the 401k may be shut down.