Practical Law Glossary Item 9-501-8651 (Approx. 3 pages)
Glossary
Top-Paid Group
For purposes of determining a highly compensated employee under the Internal Revenue Code during any given year, the top 20% of employees ranked on the basis of compensation received during that year. The employer must make an election for the top-paid group rule to apply.
The following employees may be excluded from a determination of the top-paid group:
Employees who have not attained age 21 by the end of the plan year.
Employees who have not completed six months of service at the end of the plan year.
Employees who normally work less than 17½ hours per week.
Employees who generally work less than six months per plan year.
Union employees, subject to some special restrictions.