California exempts certain computer software professionals and licensed physicians and surgeons from its overtime pay requirements if they are compensated at or above compensation levels set by the state and satisfy a primary duties test. The California Department of Industrial Relations (“Department”) adjusts the minimum compensation levels each year for the upcoming year. The adjustment is based on the state’s Consumer Price Index for Urban Wage Earners and Clerical Workers.
On October 3, 2017, the Department announced that, effective January 1, 2018, employers wishing to avail themselves of the computer software professionals’ overtime exemption must pay computer professionals a minimum of $43.58 per hour or a minimum salary of $90,790.07 annually or $7,565.85 monthly. For the licensed physicians and surgeons overtime exemption, the minimum allowable compensation is set at $79.39 per hour.
Coverage: Employers with employees in California.
Effective: January 1, 2018
Action Required: Please contact your HR Business Partner if you have any questions.