The California Department of Industrial Relations announced the new minimum salary threshold for exempt computer professionals. Effective January 1, 2020, a computer professional must receive a salary of no less than $96,968.33 per year ($8,081.71 monthly) in order to qualify for the white collar exemption. This increase reflects the 2.5% increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers over the minimum threshold from 2019.
The computer professional’s duties must also meet certain criteria for the exemption to apply—i.e., the employee must be primarily engaged in work that is intellectual or creative and that requires the exercise of discretion and independent judgment, the employee must be highly skilled and proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, or software engineering, and one or more of the following:
- The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications.
- 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.
- The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.
Misclassifying an employee as exempt when they do not meet all of the eligibility criteria for the exemption can create significant liability for an employer in unpaid overtime, meal and rest break premiums, liquidated damages and other penalties/damages. As such, it is important for employers to carefully analyze the salary basis and duties tests for all white-collar exemptions and consult with legal counsel.