First year of company and HCE determination

[Guest smhjr]

How are you dealing with a startup company in which everyone employed by the company is making over $90,000? There is no lookback data to determine if they are highly compensated. Should I just use the same rationale as a person that is hired during the year and is highly compensated? That would mean that all of the non owner employees are non highly compensated for the first year.

I've talked to a colleague that said the 2 companies he has worked for in the past has used curent compensation for the first year of a company's existence. He did say he didn't know if that was right or not, but it's what they did.

[Blinky the 3-eyed Fish]

That would mean that all of the non owner employees are non highly compensated for the first year.

Yes, that is exactly what it means.

I've talked to a colleague that said the 2 companies he has worked for in the past has used curent compensation for the first year of a company's existence. He did say he didn't know if that was right or not, but it's what they did.

If I recall correctly, the old rules used current compensation as a factor for HCE determination. But if these former employers did it that way under the new rules, well I wonder what other rules they made up.