The Department of Industrial Relations recently announced an increase in the minimum hourly wage required for certain computer software workers who are exempt from overtime under California Labor Code section 515.5. Specifically, the DIR raised the computer software employee minimum hourly rate of pay exemption from $41.27 to $41.85, the minimum monthly salary exemption from $7,165.12 to $7,265.43, and the minimum annual salary exemption from $85,981.40 to $87,185.14. The increases become effective on January 1, 2016 and are based on the 1.4% increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers.

In brief, in addition to the pay requirements set forth above, to be exempt for overtime requirements, a computer software employee must be primarily engaged in intellectual or creative work that requires the exercise of discretion and independent judgment. He or she must be highly skilled and proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming and software engineering. In terms of duties, the computer software employee must be primarily engaged in one or more of the following: the application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications; or the design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to, user or system design specifications; or the documentation, testing, creation or modification of computer programs related to the design of software or hardware for for personal, business or industrial computer operating systems.

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