Employer Alert: New Compensation Requirement for Computer Software Overtime Exemption | Ervin Cohen & Jessup LLP

Employer Alert: New Compensation Requirement for Computer Software Overtime Exemption | Ervin Cohen & Jessup LLP

Successful January 1, 2022, the California Office of Industrial Relations issued a new compensation threshold for exempt computer system software workforce, reflecting an raise of 5.3{4a5bba0ff4e6e71c77a43f702bcf67aaa905f098cd98a7212a705248916f19b8} from past year. 

To qualify for the extra time exemption, laptop or computer computer software workforce must be paid out a wage of at least $104,149.81 annually ($8,679.16 regular), or an hourly wage of at the very least $50.00. In addition, a personal computer software package staff must also meet up with the obligations examination established forth in California Labor Code Portion 515.5, which are also bundled in all Wage Orders except Orders 14 and 16. 

Extra exclusively, the worker ought to be generally engaged in work that is intellectual or inventive and that necessitates the workout of discretion and unbiased judgment.  Career titles do not identify of the applicability of this exemption. Fairly, the Labor Code and Wage Orders state that the computer computer software employee’s duties have to mainly consist of one or a lot more of the adhering to:

(A) The software of devices analysis methods and treatments, such as consulting with buyers, to decide hardware, computer software, or system purposeful specifications.

(B) The layout, growth, documentation, examination, development, tests, or modification of computer techniques or applications, like prototypes, based mostly on and similar to user or procedure design and style specs.

(C) The documentation, screening, development, or modification of pc systems linked to the design and style of software package or hardware for personal computer operating programs.

The laptop or computer software program worker should also be highly proficient and proficient in the theoretical and sensible application of extremely specialized facts to computer devices analysis, programming, or software program engineering.  

The exemption does not implement to an personnel who is a trainee or worker in an entry-degree situation who is learning to become proficient in the theoretical and useful application of really specialised details to computer programs analysis, programming, and application engineering.  Nor does the exemption use to an individual who has not but attained the degree of talent and knowledge vital to get the job done independently and devoid of shut supervision.  People engaged in the operation of personal computers or in the manufacture, repair service, or routine maintenance of laptop or computer hardware and similar machines are not eligible for the exemption.  Other forms of personnel, this kind of as engineers, drafters, machinists, or other gurus whose perform is extremely dependent on or facilitated by the use of computers and personal computer software program systems and who are experienced in personal computer-aided style program, which includes CAD/CAM, but who are not engaged in laptop methods examination, programming, or any other similarly experienced computer system-relevant occupation, are in the same way not suitable for the personal computer software package exemption to additional time, although other exemptions may perhaps use.  In the same way, writers engaged in crafting box labels, merchandise descriptions, documentation, advertising substance, set up and installation directions, both for print or for onscreen media that is computer-linked do not fall under this exemption.  Individuals who develop imagery for outcomes applied in the movement image, television, or theatrical sector, who may well or else meet up with the responsibilities test are singled out for exclusion by the Labor Code and Wage Orders.

The enhance is demanded by Labor Code Segment 515.5 (4), which imposes yearly changes to this threshold dependent on will increase in the California Client Selling price Index for City Wage Earners and Clerical Personnel.

The writer would like to gratefully accept the assistance of Joanne Warriner.