Compliance Tip #9–Exempt/Non-Exempt Classifications: The Computer Professional

It is a good business practice to review the exempt/non-exempt classifications of job descriptions periodically. Responsibilities change, and more importantly, the laws and criteria  change.  Recently, in a job description review for a client, I found an employee who was classified as exempt as a Computer Professional was incorrect.  The position seemed to clearly meet all the relevant criteria of “intellectual or creative, required discretion and independent judgment”, and the duties matched those in the guidelines.  So, what’s the problem?  Compensation.  This is one position where the employee must be paid at least  $39.90, annualized $83,132.93 for 2013.  This minimum pay changes annually based upon the California Consumer Price Index.   While it may seem a reasonable market rate in Silicon Valley, in other areas in California, this rate is often considerably higher than the market would dictate or the company could afford. So, you have the choice of classifying the employee as non-exempt, recording hours worked and paying overtime, or risk an possible audit and fines, should the Labor Commissioner’s office find out.   For more information about classifications, check out the Department of Labor or California Division of Labor Standards. If you have questions about your position classifications,  please contact us.