Pay Rate Increase for California Exempt Computer Software Employees
Labor Code Section 515.5 dictates that certain software employees are exempt from overtime pay and Labor Code Section 510 sets forth the minimum that these exempt software employees shall be paid.
It’s Important to first identify who is considered exempt from overtime. According to the California Department of Industrial Relations, all of the following criteria must be met:
1. The employee is primarily engaged in work that is intellectual or creative and requires the exercise of discretion and independent judgment.
2. The employee is primarily engaged in duties that consist of one or more of the following:
o The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications.
o 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.
o The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.
Next, we can look at the rough road exempt software employees have had over the last decade. In 2000 the minimum salary for an exempt employee was equal to no less than $41.00 an hour. By 2007 it had climbed to equal not less than $49.77 an hour. Unfortunately in 2008 during our economic meltdown, this amount was reduced drastically to $36.00 an hour. There have been gradual annual increases. In fact, effective January 1, 2012 the increases will be no less than $38.89 an hour, or no less than $81,026.25 annually, or no less than $6752.19 monthly.
It’s important to note that although the minimum per hour has been effective since 2000, it was until the drastic decrease in 2008 that California labor laws also made sure that there would be a monthly and an annual minimum requirement. Thus ensuring that the while the employee may not be getting time and a half for all overtime hours worked, they would be certain that their pay check would remain at or above the monthly and annual requirements while still meeting the minimum pay per hour.
California labor laws can be confusing and multifaceted. If you are a software employee, exempt or non exempt, it is recommended that you contact a California labor law attorney to be certain you are and have been paid properly over the last four years.
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