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California Computer Software Exemption

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  • California Computer Software Exemption

    An important distinction regarding this overtime exemption should be noted. California labor code 515.5 (the exemption) only applies if ALL 4 criteria are met AND the exclusion in (3) below are inapplicable:



    California Labor Code ยง515.5

    (a) Except as provided in subdivision (b), an employee in the computer software field shall be exempt from the requirement that an overtime rate of compensation be paid pursuant to Section 510 if all of the following apply:

    (1) The employee is primarily engaged in work that is intellectual or creative and that requires the exercise of discretion and independent judgment, and the employee is primarily engaged in duties that consist of one or more of the following:

    (A) The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications.

    (B) 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.

    (C) The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.

    (2) The employee is highly skilled and is proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering. A job title shall not be determinative of the applicability of this exemption.

    (3) The employee's hourly rate of pay is not less than forty-one dollars ($41.00). The Division of Labor Statistics and Research shall adjust this pay rate on October 1 of each year to be effective on January 1 of the following year by an amount equal to the percentage increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers.[This section has been modified effective 2006 as discussed above]

    (b) The exemption provided in subdivision (a) does not apply to an employee if any of the following apply:

    (1) The employee is a trainee or employee in an entry-level position who is learning to become proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering.

    (2) The employee is in a computer-related occupation but has not attained the level of skill and expertise necessary to work independently and without close supervision.

    (3) The employee is engaged in the operation of computers or in the manufacture, repair, or maintenance of computer hardware and related equipment.

    (4) The employee is an engineer, drafter, machinist, or other professional whose work is highly dependent upon or facilitated by the use of computers and computer software programs and who is skilled in computer-aided design software, including CAD/CAM, but who is not in a computer systems analysis or programming occupation.

    (5) The employee is a writer engaged in writing material, including box labels, product descriptions, documentation, promotional material, setup and installation instructions, and other similar written information, either for print or for onscreen media or who writes or provides content material intended to be read by customers, subscribers, or visitors to computer-related media such as the World Wide Web or CD-Roms.

    (6) The employee is engaged in any of the activities set forth in subdivision (a) for the purpose of creating imagery for effects used in the motion picture, television, or theatrical industry.

    2006 Text - The 2006 version of the law changes the numbering of the requirements slightly, but the requirements remain the same with the exception of the following:

    (4) The employee's hourly rate of pay is not less than forty-one dollars ($41.00), or the annualized full-time salary equivalent of that rate, provided that all other requirements of this section are met and that in each workweek the employee receives not less than forty-one dollars ($41.00) per hour worked. The Division of Labor Statistics and Research shall adjust this pay rate on October 1 of each year to be effective on January 1 of the following year by an amount equal to the percentage increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers.
    Walter

    www.california-labor-laws-attorneys.com
    "Experienced Overtime Class Action Attorneys"


    This communication does not constitute legal advice, nor establish an attorney client relationship of any kind. You should contact an attorney prior to acting on or not acting upon any information contained herein.

  • #2
    California IT professional software exemption

    A critical difference between the Computer software exemption in California and the Federal exemption is the California standard of $36 per hour for 2008 (which is increased each year) is materially higher than the federal standard of $27.63 per hour. Also, the exclusions contained in state law in California are not found in the federal law.
    Walter

    www.california-labor-laws-attorneys.com
    "Experienced Overtime Class Action Attorneys"


    This communication does not constitute legal advice, nor establish an attorney client relationship of any kind. You should contact an attorney prior to acting on or not acting upon any information contained herein.

    Comment


    • #3
      California overtime exemption

      Many do not know that employees working in foreign countries exclusively are not subject to the Fair Labor Standards Act nor the California overtime laws even though they may be American citizens or employed by American companies abroad.
      Walter

      www.california-labor-laws-attorneys.com
      "Experienced Overtime Class Action Attorneys"


      This communication does not constitute legal advice, nor establish an attorney client relationship of any kind. You should contact an attorney prior to acting on or not acting upon any information contained herein.

      Comment


      • #4
        Outside Sales Exemption California

        A governing case in California relating to the outside sales exemption was ruled on by the California Supreme Court in Ramirez v. Yosemite Water Co. The court observed in this case that the federal standards utilize a "qualitative method" to decide whether an employee is an outside salesperson while a "quantitative method" is followed under State law.
        Walter

        www.california-labor-laws-attorneys.com
        "Experienced Overtime Class Action Attorneys"


        This communication does not constitute legal advice, nor establish an attorney client relationship of any kind. You should contact an attorney prior to acting on or not acting upon any information contained herein.

        Comment

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