California Labor Code section 515.5 exempts certain computer professionals from overtime compensation.  The criteria includes set minimum compensation. The California Department of Industrial Relations (DIR) recently increased this minimum, effective January 1, 2013.

Employers will now have to pay otherwise qualified computer software employees, a minimum $39.90 per hour, up from $38.89. The new rate translates to $6,927.75/month or $83,132.93/year.

While persons who qualify for this exemption need not be paid at “time-and-a-half” or “double time” rates for overtime hours, the rules still require employers to accurately document the actual number of hours such qualified persons work.  While companies commonly direct employees to track their hours worked, employers are primarily responsible for ensuring those records are truthful and complete.

An employee is an exempt computer professional only if he or she also meets each of the high-level skills and duties criteria for that exemption. An employer should ensure that any such worker meeting the very specific requirements laid out in Labor Code section 515.5, which include but are not limited to “primarily engaged” (more than 50% of the time) in intellectual or creative work which requires “the exercise of discretion and independent judgment” as well as work in applying systems analysis to determine the “functional specifications” of hardware, software or systems; designing computer systems of programs; and/or documenting, testing, creating or modifying computer programs related to computer systems software or hardware design.

If a computer professional meets all of these requirements, he or she need possess no particular academic degree to be eligible for this exemption.

Employers who use this overtime exemption for any portion of their workforces will need to incorporate this rate change into their pay practices by the end of 2012.  For assistance, contact a knowledgeable employment law attorney.

Computer professionals also may be qualified for other exemptions from overtime compensation, including the administrative or executive exemption.  Each of those categories of course carries its distinct qualification rules.