Computer Software Employee Exemption

Information technology (“IT”) workers provide extreme value to the businesses they serve, often putting in long hours to ensure that companies can continue to function. But IT workers often do not get the compensation they deserve, because employers very often misunderstand the laws applying to IT professionals. Both federal and state law require employers to pay “non-exempt” employees a minimum wage and overtime pay. But federal and state law do not protect every employee; some employees are explicitly exempt. So-called exempt employees are not entitled to overtime pay. “Computer Software Employees” are exempt, but this exemption is far narrower than many employers understand.

The Fair Labor Standards Act (“FLSA”) is the federal law that governs the minimum wage and overtime pay. It is important to note that an exemption is not based on the employee’s job title. An employer cannot exempt an employee just by calling that employee a Computer Software Employee. Instead, the exemption is based on the employee’s substantive responsibilities and pay. In order to fall under the Computer Software Employee exemption, an employee must meet each of the following requirements:

• The employee must earn a salary of at least $455 per week or an hourly rate of no less than $27.63 per hour;
• The employee must be employed as a skilled worker in the field of computers, performing the duties listed below;
  • Systems analysis, including consulting with users to determine specific techniques and procedures;
  • Designing, analyzing, creating or otherwise developing or modifying computer systems or programs, based on or related to user or system specifications;
  • Designing, documenting, testing, or otherwise creating or modifying computer programs;
  • A combination of the above duties, so long as the combination requires the same level of skill.

The Computer Software Employee exemption does not apply to employees who primarily manufacture or repair computer hardware or equipment. Also excluded, are employees whose duties heavily involve computers, but are not primarily engaged in computer systems analysis or programming.

California’s Computer Software Employee exemption is mostly similar to FLSA’s.

However convenient it may be, an employer may not classify an employee as a Computer Software Employee just because the employee’s work involves computers. Employees nonetheless do this very thing. It is not uncommon, for an employer to improperly classify IT professionals, who troubleshoot, but do not design any software programs, as Computer Software Employees. Or classify an IT employee as exempt, even though that employee does not have discretion to make independent decisions about modifying systems. The Computer Software Employee exemption is one of the least understood and therefore one of the most commonly misused.

It is, unfortunately, very common for an employer to misclassify an employee as a Computer Software Employee. If you suspect that your employer has misclassified you as exempt and denied you overtime pay, you do not have to forfeit your rights. The misclassification lawyers at Nassiri Law Group, practicing in Orange County, Riverside, and Los Angeles can help you recover the overtime pay you deserve. Call today at (949) 375-4734 for a free case evaluation.