California Labor &
Employment Law Blog
Oct 2, 2008

Urgency Legislation Enacted Regarding Compensation of Exempt Computer Professionals

Topics: New Laws & Legislation

Earlier this week, California Governor Arnold Scwharzenegger signed AB 10 into law, amending California Labor Code section 515.5 as it relates to the overtime exemption for certain computer professionals. Prior to AB 10's enactment, computer professionals had to be paid at least $36 per hour to qualify for exemption under section 515.5. Furthermore, since the exemption was based on an hourly rate, employers were not relieved of the obligation to track hours worked for these employees in order to ensure that the employees' compensation met the minimum threshold of $36/hour for all hours worked. With the enactment of AB 10, computer professionals who are paid a salary of at least $75,000 for full-time employment qualify for the exemption. The billrelieves affected employers and employees of the obligation of tracking hours worked.

The new law was enacted as urgency legislation and takes effect immediately.

Of note, the minimum hourly rate and salary level applicable to the computer employee exemption will be adjusted annually by California's Division of Labor Statistics and Research. Employers relying on this exemption are also cautioned that it is not applicable to every type of computer occupation. The computer professional exemption under Labor Code section 515.5 is limited to specified types of computer employees whose jobs primarily involve duties such as systems analysis, development, design, and documentation. The exemption generally does not apply to entry-level computer employees or employees engaged in the manufacture, maintenance or repair of computer hardware and related equipment. Additional details regarding the types of computer duties that satisfy and do not satisfy the exemption are provided in the text of section 515.5. Employers must be mindful that applicability of the exemption depends not only on an employee's level of compensation, but also on the nature of the employee's specific job duties.

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