Computer Software Professional Exemption

As of September 2000, California recognizes an hourly computer professional exemption for certain employees in the computer software field. A computer software field employee is exempt from overtime pay if all of the following requirements are met:

  1. The employee is primarily engaged in work that is intellectual or creative and that requires the exercise of discretion and independent judgment; AND

  2. The employee is primarily engaged (spends more than half his or her time) in duties that consist of one or more of the following:

    1. The application of systems analysis techniques and procedures including consulting with users to determine hardware, software, or system specifications.

    2. The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications.

    3. The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems. AND

  3. 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; (Job title not determinative) AND

  4. The employee's hourly rate of pay is not less than $45.84 per hour for every hour worked.
If the employer cannot show all of the above, the employee is non-exempt and entitled to overtime pay and other benefits. Such employees can recover wages going back three years (and in some cases four years) from the date a complaint is filed, but only up to those wages earned since September 2000.

Under California law, the Computer Software Professional Exemption does NOT apply to:
Trainees or entry-level employees who are learning to become proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering;

Employees in computer-related occupations who have not attained the skill and expertise necessary to work independently and without close supervision;

Employees who are engaged in operation of computers or in the manufacture, repair, or maintain of computer hardware and related equipment;

Engineers, drafters, machinists or other professionals whose work includes the use of computers or computer software programs and who is skilled in computer aided design software such as CAD/CAM but who are not in a computer systems analysis or programming occupation;

Employees who write material related to computers for print or on-screen media or who write or provide content for computer related media such as the World Wide Web or CD-
ROMS;

Employees who create imagery for effects used in the motion picture, television, or theatrical industry.

California Salaried Worker Overtime Exemptions:

Many computer professionals mistakenly believe that they are exempt from overtime pay just because they are on a salary. Salaried computer and hi tech employees/professionals may be exempt under California law ONLY if they qualify under one of the traditional overtime exemptions: Administrative, Executive and/or Professional.

In order to qualify under any one of these exemptions, the employee must spend more than half their time engaged in exempt work duties, customarily and regularly exercises discretion and independent judgment in performing those duties, and earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment, currently $2,340 per month. (Two times the current minimum wage ($6.75) for full time work (40 hours/week)).

Overtime exemptions are narrowly construed against the employer asserting them, and the ultimate burden of supporting the actual application of an exemption rests with the employer.


Administrative Exemption

The administrative exemption applies to employees who perform work “directly related to management policies or general business operations of the employer.”

The employee must spend more than half their time in job duties that involve the following:
  1. regularly and directly assisting a proprietor, or an employee employed in a bona fide executive or administrative capacity, or


  2. performing under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge, or


  3. executing, under only general supervision, special assignments and tasks.
Even if you meet this description, you are NOT exempt if you are a “production employee” -- one who is primarily engaged in producing either the product or the service that a particular company exists to produce. In effect, “production” employees may not be classified as exempt under the administrative exemption because they are not performing work “directly related to management policies or business operations of the company.”


Executive Exemption

In order to qualify under the executive or managerial exemption, the employee must be involved in the management of the business. Therefore, salaried computer and high tech employees are usually more likely to be mis-classified under the administrative and professional exemptions.

A person employed in an executive capacity means any employee who spends more than half their time in job duties that involve the following:
  1. the management of the enterprise in which he/she is employed or of a customarily recognized department or subdivision thereof; and


  2. customarily and regularly directing the work of two or more other employees therein; and

  3. having the authority to hire or fire other employees or whose suggestions and
    recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight
Professional Exemption

The professional exemption generally applies to a person who is certified or licensed by the State of California and is primarily engaged in the practice of a profession such as: law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting; or who performs work which requires knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from (i) a general academic education; (ii) an apprenticeship; or (iii) training in the performance of routine mental, annual, or physical processes or an artistic profession.

Guidance from the California Labor Commissioner suggests that in California an advanced degree, above a B.A. or B.S., is necessary to meet the learned profession exemption. Accordingly, it is unlikely that a significant number of employees working in computer-related fields would qualify for the professional exemption exception.




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