The following is provided for information purposes, and not meant to be legal advice.
California Assembly Bill (AB) 1093 went into effect on January 1, 2006. This law clarifies the computer professional exemption in California by amending California Labor Code Section 515.5.
Labor Code Section 515.5 creates a partial exemption for computer professional employees. The statute requires that employees be paid a certain hourly rate. AB 1093 facilitates paying computer professionals a salary, but it does not create a full exemption from overtime pay for employees who work more than 40 hours. Employers are to continue to pay computer professionals for every hour worked at the established hourly rate, even when they pay employees a salary.
The computer professional exemption requires a two-part test. The first part requires that the employee perform certain duties. The second part requires certain compensation.
1. The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional 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
Job titles are not determinative.
Under the compensation test, Labor Code Section 515.5 requires that an employer pay computer professionals a certain per hour rate for every hour worked. The employee's salary might cover the initial 40 hours, but if the individual does not qualify for another exemption, the employer must pay for hours that exceed 40 hours at the same per hour rate.
Tracking the hours of computer professionals is important. If an employer fails to adhere to the exemption requirements, the employer can be liable for wages owed, penalties, or lose the exemption if exposed to claims for traditional overtime payments (i.e., 1.5 times or 2.0 times the regular rate).
The state Division of Labor Statistics and Research adjusts the hourly rate on October 1 of each year to be effective January 1 of the following year. The hourly rate may be increased based on the Consumer Price Index for Urban Wage Earners and Clerical Workers. The Department of Industrial Relations provides information on the current applicable hourly rate.
Comment Preview