Beginning Jan. 1, 2024, California employers may have to pay overtime to more computer software employees who earn less than $115,763.35 per year, or $55.58 per hour, or $9,646.96 per month.
On Oct. 1, the California Department of Industrial Relations (DIR) issued new annual adjusted minimum thresholds for computer software employees who are considered exempt from the state's overtime requirements under California Labor Code Section 515.5.
The adjustments raised the minimum annual salary exemption from $112,065.20 to $115,763.35, the minimum monthly salary exemption from $9,338.78 to $9,646.96, and the minimum hourly rate of pay exemption from $53.80 to $55.58.
Section 515.5 provides that employees in the computer software field are exempt from California's overtime pay requirements if they meet certain criteria, including earning a statutory minimum rate.
The DIR is responsible for adjusting those minimums each October, based on the California Consumer Price Index (CCPI) for urban wage earners and clerical workers. According to the DIR, the CCPI for urban wage earners and clerical workers increased 3.3 percent from 2022.
In addition to the minimum pay rate, the computer software employee exemption applies to employees who are "primarily engaged in work that is intellectual or creative and that requires the exercise of discretion and independent judgment," are "highly skilled," and have job duties such as computer programming, systems analysis, or software design and testing.
Likewise, the federal Fair Labor Standards Act (FLSA) exempts certain computer employees. In September 2023, the U.S. Department of Labor's Wage and Hour Division (WHD) published a proposal to increase the minimum thresholds to qualify for that exemption. The proposed increase would be to $1,059 per week, $55,068 annually for a full-year worker.
Christopher W. Olmsted and Zachary V. Zagger are attorneys with Ogletree Deakins in San Diego and New York City. © 2023. All rights reserved. Reprinted with permission.
An organization run by AI is not a futuristic concept. Such technology is already a part of many workplaces and will continue to shape the labor market and HR. Here's how employers and employees can successfully manage generative AI and other AI-powered systems.
Related Content
HR must always include human intelligence and oversight of AI in decision-making in hiring and firing, a legal expert said at SHRM24. She added that HR can ensure compliance by meeting the strictest AI standards, which will be in Colorado’s upcoming AI law.
The proliferation of artificial intelligence in the workplace, and the ensuing expected increase in productivity and efficiency, could help usher in the four-day workweek, some experts predict.
Learn how Marsh McLennan successfully boosts staff well-being with digital tools, improving productivity and work satisfaction for more than 20,000 employees.