Revision of Labor Code Removes Overtime Pay for Some Computer Software Employees
October 7, 2008
Sacramento, CA - Governor Arnold Schwarzenegger signed into law a revision of the Labor Code of California, which provides that employees in the field of computer software are not entitled to overtime pay if they meet particular conditions.
To meet the requirements for the exemption, these employees have to be predominantly engaged in a work that is considered "intellectual or creative" and that obligates the implementation of independent judgment and discretion.
Also, these employees have to do specific types of responsibilities, such as programming, systems analysis, or software designing and have to be highly skilled and skillful "in the theoretical and practical application of highly specialized information to computer systems analysis, programming, or software engineering."
The prior law in California exempted employees in the field of computer software from overtime pay if they were salaried at $36.00 on an hourly basis or received a yearly income that was equal to $36 per hour.
Due to the vagueness in the previous law, the lawyers of the plaintiffs reasoned that employers who utilized the exemption were obligated to trace the hours worked by these covered employees. The revision clarifies the previous law by stating an annual income above which those qualified employees are not entitled to overtime pay and so removes the need to trace the hours worked by these employees.