As of September 30, 2008, exempt computer professionals in California can be paid a minimum of $75,000 per year for full-time employment on a salaried basis, rather than the previous requirement of at least $36 per hour. This welcome change eliminates a significant timekeeping burden, as employers can now treat computer professionals like other exempt, salaried employees.
Under prior law, exempt computer professionals had to be paid a minimum of $36 per each hour worked (or an annualized full-time salary equivalent). Regardless of whether employers chose to pay computer professionals by an hourly rate or by the annual salary equivalent, employers previously had to record the hours worked by computer professionals to ensure that each hour of worked was compensated at the minimum rate of $36. Failure to meet this minimum hourly rate for every hour worked would risk a loss of the exemption, and would result in possible claims for unpaid overtime, meal and rest period violations, and penalties.
The recent change to the law gives employers the attractive option of paying full-time, exempt computer professionals on a straight salary basis, without the need to keep track of the hours worked to ensure that the $36 hourly rate is met. The $75,000 minimum annual salary properly compensates exempt computer professionals for all hours worked throughout the year, regardless of the total number of hours worked.
To qualify for the exemption, the salary must be paid at least $6,250 once a month. The minimum hourly rate and minimum annual salary is subject to annual adjustment, to be effective January 1 of each year. The changes to the computer professional exemption do not affect the "duties" portion of the exemption, which still must be met in order for the exemption to apply.