California’s Computer Professional Exemption Minimum Compensation to Increase by 2.5% Next Year
Topics: New Laws & Legislation, Wage & Hour Issues
Section 515.5 of the California Labor Code provides that certain California computer software professionals are exempt from the overtime requirements of state law outlined in the various wage orders and section 510 of the Labor Code. One of the criteria for qualifying for this exemption is that the employee’s compensation is equal to or greater than the specified minimum pay rates set by the California Department of Industrial Relations (DIR).
Effective January 1, 2025, the DIR adjusted the computer software professional’s minimum hourly pay rate to qualify for the exemption from $55.58 to $56.97 and the minimum monthly salary for the exemption from $9,646.96 to $9,888.13. Finally, for those professionals paid annually, the minimum annual salary exemption moves from $115,763.35 to $118,657.43.
If you are employing computer software professionals on an exempt basis in California and using the provisions of Section 515.5 of the Labor Code to qualify the employee as exempt, you'll want to make sure the employee continues to receive the minimum compensation required when this change is implemented on January 1, 2025.
In addition to the salary requirement, the employer must also show that an exempt California computer professional satisfies the duties test set forth under Labor Code Section 515.5. This includes proving that the exempt computer professional employee regularly exercises discretion and independent judgment while engaged in intellectual or creative work. The duties test does not change from 2024 to 2025. California employers can determine if their computer software professionals perform the duties necessary to fulfill the duties test by comparing the duties their computer software employees perform and comparing it with the requirements of the statute.
