California updates 2018 computer overtime exemptions

The Department of Industrial Relations, in accordance with Labor Code Sec. 515.5(a)(4), has adjusted the computer software employee’s minimum hourly rate of pay exemption from $42.35 to $43.58, the minimum monthly salary exemption from $7,352.62 to $7,565.85, and the minimum annual salary exemption from $88,231.36 to $90,790.07, effective January 1, 2018, reflecting a 2.9% increase in the cost of living.
In accordance with Labor Code Sec. 515.6(a), the Department has adjusted the licensed physicians and surgeons employee’s minimum hourly rate of pay exemption from $77.15 to $79.39 effective January 1, 2018, also reflecting an increase of 2.9%.
California Labor Code Sections 515.5 and 515.6 provide exemptions from state overtime requirements under Labor Code Section 510 for both computer software employees and for licensed physicians and surgeons if certain criteria are met. One of the criteria is that the employee’s hourly rate of pay is not less than a certain amount, and this amount is adjusted each year on October 1 to be effective on January 1 of the following year, based on the percentage increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers (CCPI).
Assembly Bill 10, L. 2008, amended Section 515.5 to extend the exemption for computer software employees to salaried employees whose annual and monthly salaries are not less than the statutorily specified rates, which the Department is responsible for adjusting each October 1, effective the following January 1.
The adjustments for 2018 are based on the CCPI for the period August 2016 (246.735) to August 2017 (253.874) and reflect an increase of 2.9%. (State of California, Department of Industrial Relations, Office of the Director-Research Unit, Memorandum from Maria Y. Robbins, Deputy Chief, Office of the Director, to Christine Baker, Director, DIR, on the subject of Overtime Exemption for Computer Software Employees, October 3, 2017, http://www.dir.ca.gov/oprl/ComputerSoftware.pdf; State of California, Department of Industrial Relations, Office of the Director-Research Unit, Memorandum from Maria Y. Robbins, Deputy Chief, Office of the Director, to Christine Baker, Director, DIR, on the subject of Overtime Exemption for Licensed Physicians and Surgeons, October 3, 2017, http://www.dir.ca.gov/oprl/Physicians.pdf.)

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