Senate Bill (“SB”) 929 amends California Labor Code section 515.5, which creates an overtime exemption for computer professionals. The amended statute reduces the hourly rate computer workers must earn in order to be exempt from the overtime regulations of California law. Specifically, the hourly rate of pay requirement has been decreased from $49.77 per hour to $36.00 per hour. Accordingly, a computer professional who earns an income that amounts to $36.00 per hour or more can lawfully be classified as an exempt employee provided all other exempt requirements are met. The pay rate shall be adjusted on October 1st of each year to be effective on January 1st of the following year by an amount equal to the percentage increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers.

According to Diana Tsudik of our Los Angeles office, this amendment is a pro-employer development which makes it easier to classify highly compensated computer professionals as exempt employees.