As of January 1, 2023, California employers must compensate their computer professional employees with an annual salary of $112,065.20 or more ($9,338.78 a month or $53.80 an hour) to be exempt from paying them overtime.
In addition, these professionals must perform certain work duties to qualify as exempt employees. Examples of exempt computer professionals may include
- skilled computer programmers,
- computer systems analysts, and
- computer employees working within particular software system design specifications.
Sometimes an employer may misclassify a worker as a computer professional. If this happens, then the employee may be able to:
The Fair Labor Standards Act (FLSA) is the federal statute that also makes computer professionals exempt from:
Our California labor and employment lawyers will address the following in this article about the computer professional exemption:
- 1. What laws are computer professionals exempt from?
- 2. What employees are considered to be computer professionals?
- 3. What happens if an employer misclassifies a worker?
- 4. Are there federal laws that apply to these skilled workers?
- Additional resources
1. What laws are computer professionals exempt from?
Computer professionals in California, to the extent they are properly classified as exempt, are not covered by the following employment laws and rights:
- state overtime requirements that authorize extra pay for excessive work,
- minimum wage rules that help provide for a minimum salary among workers (as determined by the California Consumer Price Index – CPI – for Urban Wage Earner and Clerical Workers), and
- laws ensuring employees can take a meal break or a rest period.1
For example, a computer professional is not entitled to a minimum hourly rate that applies to every workweek. Nor is the professional guaranteed – by law – a minimum salary level.
Other exempt workers
California employers not protected by the above laws are often referred to as exempt employees or exempt workers.
In addition to computer professionals, the following are also exempt employees:
Those covered under the laws enjoy a non-exempt status.
2. What employees are considered to be computer professionals?
California labor laws say that workers qualify as an exempt computer professional if they pass both the:
- salary test, and
- job duties test.
2.1. Salary test
According to this test, workers get labeled a “computer professional” if they satisfy the job duties test, and:
- make above a certain hourly wage or rate, or
- if paid a salary, makes above a certain annual salary basis or threshold.
State laws say that workers are computer professionals if they make at least $53.80 per hour. If paid a salary, employees are computer professionals if they make at least $112,065.20 a year (or $9,338.78 a month).2
2.2. Job duties test
The job duties test is a bit more complicated than the salary test. It also means that a worker must be involved in more than the use of computers to be exempt.
Part 1 of the test
Part 1 of the test says that a worker qualifies as a computer professional if the worker is:
- primarily engaged in intellectual or creative work that requires the exercise of discretion and independent judgment, and
- highly skilled and is highly proficient in the theoretical and practical application of highly specialized information to computer systems analysis, computer software programs, or software engineering.3
As to this last requirement, note that it cannot be met by job titles alone.4
Part 2 of the test
Part 2 of the duties test says that workers are exempt if the employees’ primary duty consists of one or more of the following:
- the application of systems analysis techniques and procedures,
- the design, development, testing, or modification of computer systems or programs, and
- the documentation, creation, or modification of computer programs related to design software or computer hardware (or related equipment) for computer and machine operating systems.5
The qualification will apply if a primary duty consists of either one of the above or a combination of the aforementioned duties.
Note that an employee must pass both part 1 and part 2 of the job duties test for the employee to be labeled a computer professional.
3. What happens if an employer misclassifies a worker?
Sometimes an employer will make a mistake and erroneously classify a worker as a computer professional. Other times, this misclassification may be done on purpose.
In any event, misclassifications often result in a worker losing out on:
- higher hourly wages due to minimum wage laws,
- overtime pay, or
When this happens, the employee can file a wage/hour lawsuit against the employer to recover any unpaid wages.
Many times, unpaid overtime pay is a large component of any compensation in these cases. California law says that workers not included in the overtime exemption can get paid time and a half when they work:
- more than 8 hours in a day,
- more than 40 hours in a single workweek, and/or
- more than 6 days in a workweek.6
In addition to unpaid wages, workers in a wage/hour lawsuit may receive compensation for any missed meal and rest breaks. Employers owe one hour of pay for each meal or rest break that an employee should have received.7
4. Are there federal laws that apply to these skilled workers?
The Fair Labor Standards Act (FLSA) is the federal statute that also puts computer professionals in an exempt status. The FLSA is enforced by the U.S. Department of Labor (DOL).
Under the FLSA, a worker is an exempt computer employee if he/she:
- is paid via a salary and makes more than $684 per week (or if an hourly rate, then more than $27.63 an hour), and
- performs certain job duties that are similar to those set forth under California law.8
Federal and state employment laws are often similar in the specific rules they establish. If there is a difference or conflict though, employers are legally required to apply those laws that benefit the employee the most.9
For more information, refer to the following:
- Fact Sheet #17E:Exemption for Employees in Computer-Related Occupations Under the Fair Labor Standards Act (FLSA) – Fact sheet by the U.S. Department of Labor.
- Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA) – Fact sheet by the U.S. Department of Labor.
- Overtime Exemption for Computer Software Employees – The California Department of Industrial Relations reveals the minimum salary where computer software employees become exempt workers.
- “Employee in the computer software field” – Definition by the California Department of Industrial Relations.
- FLSA Exemptions and the Computing Workforce – Article in the Hous. Law Review.
- See, for example, Labor Code 512. See also 8 CCR 11040. See also Effects of COVID-19 Pandemic and Response on the Consumer Price Index, U.S. Bureau of Labor Statistics.
- California Labor Code 515.5a4. Note that the wage rates used in the statute have not been amended yet to account for annual inflation rates. The California Department of Industrial Relations (DIR) increased the compensation threshold for exempt employees by 2.5% over the 2019 rates.
- California Labor Code 515.5a1 and 515.5a3. As to 515.5a3, see also Martin v. Indiana Michigan Power Co. (6th Cir. 2004) 381 F.3d 574.
- California Labor Code 515.5a3.
- California Labor Code 515.5a2.
- California Labor Code 510.
- 8 CCR 11040(11)(B) — Administrative exemption regulations.
- 29 CFR 541.400.
- 29 U.S.C. § 218. See also Aguilar v. Association for Retarded Citizens (1991) 234 Cal.App.3d 21.