Computer Professional Exemption

Generally, unless an employee is exempt, he or she is entitled to overtime pay. The default is rule is that overtime is calculated at 1.5 times an employee's regular rate of hourly pay, or "time and a half," for each hour worked beyond 8 hours per workday or 40 hours per workweek. There are exemptions to this general rule. One such exemption applies to computer professional employees.

Computer Professional Exemption

To be classified as an exempt computer professional the employee must meet two tests: (1) compensation, and (2) job duties. The exemption applies only when both tests are met.

Compensation Test

The compensation test is straightforward. Effective January 1, 2018, computer software employees will have to earn a salary of $90,790.07 annually or an hourly wage of $43.58 to qualify for the exemption (see, https://www.dir.ca.gov/oprl/ComputerSoftware.pdf). Each year, California's Department of Industrial Relations (DIR) adjusts both the minimum hourly pay rate and the salary level for the following year based on the California Consumer Price Index.

Duties Test

The duties test requires more in-depth analysis. An employee in the computer/software field is exempt only if all of the following conditions apply:

  • The employee is primarily engaged in work that is intellectual or creative, and that requires the exercise of discretion and independent judgment.
  • The employee is highly skilled and proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming and software engineering.

Further, the employee's primary duties must consist of one, or more, of the following:

  • Application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications.
  • Design, development, documentation, analysis, creation, testing or modification of computer systems based on and related to user or system design specifications.
  • Responsible for documenting, testing, creating or modifying computer programs related to the design of software or hardware for computer operating systems.

The exemption does not apply to an employee if any of the following apply:

  • The employee is a trainee or an employee in an entry-level position;
  • The employee has not attained the level of skill and expertise necessary to work independently and without close supervision;
  • The employee is engaged in the operation of computers;
  • The employee is engaged in the repair or maintenance of hardware;
  • The employee is engaged in the manufacturing of computers;
  • The employee is an engineer, drafter, machinist or other professional whose work is highly dependent on use of computer software programs (e.g., CAD);
  • The employee creates manuals, instruction, website content, or other written materials associates with computer use;
  • The employee creates imagery for use in the motion picture, television or theatrical industry.

The duties test required in depth analysis of the employee's actual job duties. What is clear, is that just because an employee is paid sufficient hourly pay or salary his or her duties may bar the exemption from applying based on the employee's experience level, skill, and actual duties.

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If you believe you have been misclassified, or have questions about any of the above, call us at 415-445-0900 or contact us online to schedule a free initial consultation.