Computer Software Professionals Overtime Exemption Rates

California Labor Code section 515.5 exempts certain computer software professionals from overtime compensation upon receipt of specified minimum compensation.

California’s Department of Industrial Relations (DIR) has announced its rate increase for this minimum, effective January 1, 2022, to $50.00, up from $47.48.  Alternatively, an otherwise qualified salaried employee is eligible on minimum annual compensation of $104,149.81, up from $98,907.70, payable at least once monthly at no less than $8,679.16.

An exempt computer professional must also meet each of the Labor Code section 515.5high-level skills and duties criteria. Among these, the employee must be “primarily engaged” (more than 50% of the time) in intellectual or creative work requiring the exercise of discretion and independent judgment such as  ● applying systems analysis to determine “functional specifications” of hardware, software or systems; ● designing computer systems or programs; and/or ● documenting, testing, creating or modifying computer programs related to computer systems software or hardware design.

Although these workers need not be paid overtime premium under California law, employers should further ensure they meet the comparable federal law exemption, which includes a less restrictive definition of “primary” duty, a lower hourly/salaried threshold, and similar skills and duties tests.

Such computer professionals may also qualify for the administrative, executive or “learned profession” exemptions from overtime. Each category possesses its own distinct qualifications.

For more information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

Cindy Bamforth
November 10, 2021