2013 Compliance Tip #1—Exempt Classifications: Computer Software Employees

There are going to be many new labor laws which become effective in 2013 for employers.  This is the first in a series of tips to keep you aware of what’s happening. 

(But first, my disclaimer.  CRS is a Human Resources consulting firm, therefore this is not to be construed as legal advice, so be sure to check with your labor attorney.)

To ensure you have classified your Computer Software employees correctly as Exempt employees, they must meet all of the following requirements.

The employee:

  • Is primarily engaged in work that is intellectual or creative
  • Is primarily engaged in work that requires the exercise of discretion and independent judgment
  • Is primarily engaged in duties that consist of one or more of the following:
    • Applying systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications
    • Designing, developing, documenting, analyzing, creating, testing or modifying computer systems or programs, including prototypes, based on and related to user or system design specifications
    • Documenting, testing, creating or modifying computer programs related to the design of software or hardware for computer operating systems
  • Is highly skilled and proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming and software engineering
  • Has an hourly rate of pay not less than that set by law. If the employee is paid on a salaried basis, the employee earns an annual salary which is paid at least once a month and in a monthly amount of not less than 2013 rates set below.

California’s Department of Industrial Relations (DIR) announced rate changes for the computer software employee exemption, effective January 1, 2013.

For the Computer Software employees exemption:
Minimum hourly pay rate exemption for 2013 is $39.90 from its 2012 rate of $38.89.
Minimum monthly salary will be $6,927.75 from its 2012 rate of $6,752.19
Minimum annual salary will be $83,132.93 from its 2012 rate of $81,026.25.

Hope this is useful to you…stay tuned for even more tips.

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