Highly Compensated Employee (HCE)

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In the context of certain fringe benefit plans, an employee who is an owner or officer of a business or whose salary exceeds a certain amount (indexed each year for inflation).  Many benefits offered by employers do not qualify for favorable tax treatment if they discriminate in favor of highly compensated employees.  An employer may also be restricted in their use of safe-harbor valuations of benefits provided to such employees.

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