Computer Software Employee Exemption
Section 515.5(a)(4) of the California Labor Code requires an annual update to the compensation rate for exempt computer software employees, based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers. Accordingly, starting January 1, 2017, exempt computer software employees must be paid no less than $42.35 hourly (up from $41.85), $7,352.62 weekly (up from $7,265.43), or $88,231.36 annually (up from $87,185.14).
Reminder: California Minimum Wage and Exempt Employee Salary Increase
SB 3, passed earlier this year, increased California minimum wage rates. Effective January 1, 2017, the statewide minimum wage for employers with at least 26 employees increased to $10.50 per hour, with incremental increases through 2022 when the rate hits $15 hourly. Employers with up to 25 employees are subject to a one-year delay for the rate increases, with minimum wage remaining at $10 per hour for 2017 and increasing to $10.50 next year. The California Labor Commissioner has published an FAQ, including a schedule of rate increases, regarding the new minimum wage rates. The increased minimum wage rate also impacts the salary thresholds for exempt executives, administrators, and professionals under California law, increasing it to $43,680 annually for employers with at least 26 employees. Employers should also be sure to comply with higher minimum wage rates imposed by local ordinances in cities such as San Francisco, Emeryville, and Oakland, as applicable.