Certain nonsalaried
computer software professionals are exempt from overtime, but determining
whether someone qualifies for this exemption can be tricky. We’ll walk you
through the requirements.
Background
In 2000,
created an overtime exemption for computer professionals, similar to an exemption
under the federal Fair Labor Standards Act, but more rigorous. Note that the
exclude positions that meet the requirements for another overtime exemption
(such as the administrative exemption), but simply offers an additional way for
workers to qualify as exempt.
No special certification
or academic degree is required for this exemption, although many computer
professionals who qualify do have a bachelor’s degree or higher. Also, keep in
mind that job titles don’t determine whether an employee is an exempt computer professional.
Rather, exemption is based on a position’s duties and characteristics.
The Exemption Test
An employee qualifies as
an exempt computer professional if all of the follow requirements are
satisfied:
• The employee is
“primarily engaged” (spends more than half of his or her work time) in work
that is intellectual or creative.
• The employee is
primarily engaged in work that requires discretion and independent judgment. •
The employee is primarily engaged in duties that consist of one or more of the
following:
1. Applying systems
analysis techniques and procedures, including consulting with users, to
determine hardware, software, or system functional specifications.
2. Designing,
developing, documenting, analyzing, creating, testing, or modifying computer
systems or programs, including prototypes, based on and related to user or
system design specifications.
3. Documenting, testing,
creating, or modifying computer programs related to the design of software or
hardware for computer operating systems.
• 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.
• The employee is paid
at least the minimum hourly rate set annually by the state Division of Labor Statistics
and Research, which is based on the California Consumer Price Index. The
current minimum rate is $47.81. You can also satisfy this requirement by paying
the employee a salary that is the annualized full-time equivalent of the
applicable minimum hourly rate—provided all other exemption requirements are
met and the employee receives at least the minimum rate per hour for all hours
worked.
Paying Overtime: 10 Key Exemption Concepts
Only one thing really matters in the determination as to whether or not an employee is exempt: The duties the employee performs. Learn how to avoid costly, preventable mistakes with our free White Paper, Paying Overtime: 10 Key Exemption Concepts.
Exceptions
Even if an employee
meets the requirements above, the person is not exempt if his or her job falls
into any of the following categories:
• Trainees and entry
level. The employee is a trainee or involved in an entry-level position,
learning to become proficient in the theoretical and practical application of
highly specialized information to computer systems analysis, programming, and
software engineering. Or, the employee is in a computer- related occupation but
hasn’t attained the level of skill and expertise necessary to work
independently and without close supervision.
• Computer operators.
The employee is engaged in operating computers or in the manufacture,
repair, or maintenance of computer hardware and related equipment.
• Computer-aided
design (CAD) users. The employee is an engineer, drafter, machinist, or
other professional whose work highly depends on or is facilitated by the use of
computers and computer software programs, and who is skilled in computer-aided design
software, including CAD/CAM, but who is not in a computer systems analysis or
programming occupation.
• Writers. The
employee writes material, including box labels, product descriptions,
documentation, promotional material, setup and installation instructions, and
other similar written information, either for print or for onscreen media, or
writes or provides content material intended to be read by the customers,
subscribers, or visitors to computer-related media such as the Internet or
CD-ROMs.
• Special effects
artists. The employee creates imagery for effects used in the motion
picture, television, or theatrical industries.
Use Caution
As with other
exemptions, it is important to play it safe when determining whether an
employee is covered by the computer professional exemption. If in doubt, it’s
best to classify the position as nonexempt or consult an expert—if you make a
mistake and don’t pay someone overtime, the legal costs can be sky high. The
labor commissioner’s website has additional information on this exemption at www.dir.ca.gov/dlse/FAQ_OvertimeExemptions.htm.