Update: Are Your “Computer Professionals” Really Exempt?

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Both California law and federal law recognize exemptions for computer professionals from the statutory obligation to pay overtime for hours in excess of 40 hours a week (state and federal) and 8 hours a day (state only). While these exemptions are written broadly, e.g., the federal computer professional exemption purports to include such common job titles as computer programmer, systems analyst, and software specialist, the application of the exemptions has been narrowly construed under federal law and has not been tested under California law. The U.S. Department of Labor (DOL) recently issued an opinion letter concluding that certain IT support specialist positions failed to meet both the administrative and the computer professional exemptions

from the overtime pay requirements under the FLSA. DOL Op. Ltr. WHM 99:8653 (Oct. 26, 2006). Shortly after the opinion letter was released, two substantial settlements in California class-action lawsuits involving IT employees were announced. The first settlement was for $27.5 million and covered approximately 800 Siebel Systems software engineers. The second settlement was for $65 million and covered approximately 32,000 IBM technical services and IT employees. As these cases demonstrate, IT employees are increasingly at the center of wage and hour litigation.

To avoid misclassification of employees and costly claims for back overtime wages, employers should look past job titles and closely examine the work performed by their computer professionals to determine whether the exemptions apply.

This Commentary is meant to provide a basic overview of the “computer professional” exemption under California and federal law and to suggest guidelines for a proper determination of the exempt or nonexempt status of employees in computer-related fields. Moreover, whether persons occupying those jobs qualify under the learned professional and administrative exemptions will also be examined.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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