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Minimum Pay for Computer Worker Exemption is Decreased

The “Governator” signed SB 929 which, among other things, amends Labor Code Section 515.5, the Computer Software Exemption. The amended statute reduces the hourly rate computer workers must earn in order to be exempt from the overtime regulations of California law.

Beginning January 1, 2008, computer workers must receive at least $36.00 per hour and be primarily engaged in duties that meet the tests set forth in Labor Code Section 515.5. The computer exemption is the only California exemption that allows the employee to receive an hourly wage and still be exempt from overtime requirements. Employers can choose to pay the salary equivalent of $36.00 per hour, which would be $74,880.00. On September 30, 2008, the Governor signed AB 10 which increased the minimum annual salary to $75,000.00.

When Labor Code Section 515.5 was initially enacted, employers had to pay at least $41.00 per hour to meet the exemption. The Labor Commissioner was (and still is) required to increase the amount every year. The Labor Commissioner’s last increase (announced October 2006 and became effective January 2007) increased the minimum hourly rate to $49.77 per hour.

The Labor Commissioner will continue to increase the minimum hourly rate for computer workers each year based on the California Consumer Price Index for Urban Wage Earners and Clerical Workers, but now it will be starting from a lower hourly rate.

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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