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Pay Increase for Exempt Computer Software Employees

DIR Increases Minimum Hourly Rate for Computer Software Employees

Labor Code Section 515.5 provides an exemption from the overtime requirements of California law for certain computer workers provided they perform specific functions and are paid a minimum hourly rate. Each year the minimum hourly rate increases based on the California Consumer Price Index.

The Department of Industrial relations recently announced that the minimum hourly rate for exempt computer software employees will increase from $47.81 to $49.77 per hour effective January 1, 2007. This means that in addition to performing the duties specified in Labor Code Section 515.5, computer software employees must earn $49.77 per hour or receive a salary of $103,521.60 per year to qualify for the exemption. If the computer software employee receives less than the minimum required, the employee must be paid time and one-half for all hours worked in excess of eight hours per day or forty hours per week.

A copy of the DIR’s memo can be downloaded at:

If you employ computer software workers, we recommend having an attorney review the employees’ pay rates and job duties to ensure the employees meet the exemption.

The Law Office of Phillip J. Griego
95 South Market Street, Suite 520
San Jose, CA 95113
Tel. 408-293-6341
Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.

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Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.