The Computer Professional Exemption

The exemption pay rate for computer professionals in California is going up this weekend.

Many computer professionals believe that they are exempt from overtime pay just because they are on a salary. That belief is usually misguided. Programmers are rarely [correctly] classified as exempt professionals or administrators, because few computer programmers meet the definitions of the wage order exemptions. There are three commonly applied exemptions for salaried workers:

(i) The administrative exemption: this applies to employees who perform work "directly related to management policies or general business operations of the employer." Even if you meet this description, you are no exempt if you are a "production employee" -- one whose primary duty is producing the goods or services that the business exists to produce.

(ii) The executive or "managerial" exemption: this applies to employees "whose duties and responsibilities involve the management of the enterprise." There are a number of tests, all of which must be met, for an employee to qualify for this exemption, e.g., the employee must have the power to hire and fire (or have significant input into hiring and firing) and must supervise two or more subordinates.

(iii) The professional exemption:  this generally applies to licensed professions, such as lawyers, accountants, doctors and similar occupations.

Very, very few computer workers fall into any of these three exemptions. Thus, if you are a software engineer who spends a majority of time doing software-related work, such as writing code, debugging and similar tasks, if you work long hours for a fixed salary, your employer might owe you a significant amount of back overtime.

The same is not necessarily true of employees in the computer software field who are paid by the hour. Software professionals can be exempt from overtime pay if they are paid by the hour, and they earn more than $44.63 per hour. This rate increases to $45.84 per hour on January 1, 2005. The software professional exemption is different from most of the other exemptions, because it requires that the employee receive pay for every hour -- overtime or otherwise -- that the employee works. The exemption merely excuses the employer from paying the overtime premium rate of time-and-a-half.

Do you have a case? If you work in California and spend most of your time programming software, and you do not get paid for more than 40 hours per week, or 8 hours per day, you probably have a case. If you would like to have your situation reviewed to see if you have a claim, drop us an email and we would be happy to give you a free evaluation.

Comments

[William]

I worked for a company for years. I consistently worked weeks of 60-80 hours. I did not supervise others, nor did I have hiring/firing authority. My final paycheck was issued more than two weeks late and did not include any overtime. Furthermore, I have submitted two requests for expenses due me. To date, these have not been paid either.