California IT Overtime: Are You Asking the Right Questions?

San Francisco, CAGround lost by computer IT professionals notwithstanding, the computer IT overtime issue that has been the source of constant frustration is even more so given the new remuneration guidelines, brought in at the start of this year. All the more reason for computer professionals to ensure they—and their jobs—are properly classified.

Otherwise, you could be losing more than just money. You could be losing your health, and your reputation over the long term.

Over the last few years the computer industry in California has lobbied for, and achieved significant concessions in the thresholds by which they are required to pay overtime. As the exempt threshold comes down, it means for the employer an opportunity to qualify fewer employees for owed overtime, and increase the number of employees who are exempt.

The latest amendment to California Labor Code section 515.5 that came into law January 1st allows employers to remunerate computer professionals who are exempt from overtime a monthly, or annual salary—effectively superseding the previous requirement for a minimum hourly rate. The amendment effectively raises the hourly rate to $37.94, but for regulatory purposes sees the minimum monthly salary exemptions at $6,587.50 per month, or $79,050.00 per annum.

What this means is that if you are paid at this level or higher, you are exempt from claiming overtime. This also assumes that the type of work you do is also properly classed as being exempt. Not all jobs are. Given the frequency by which employers have tried to get around the exemption issue by purposely misclassifying jobs and workers, it is in your best interest to ensure that you, and the work you do, are properly classified.

It should be noted that regardless of your exempt status for overtime purposes, you are NOT exempt from meal breaks and rest periods. Those should be properly provided. If they are not, you have a labor claim against your employer in California.

But here is the $64,000 question (or $79,050 question, if you like)…

If you, as a computer IT professional, take home a salary of equal value that meets the minimum exempt threshold, then the employer—assuming you, and your job are properly classified—does not owe you a dime of overtime. You are considered a salaried employee, and as such are not owed overtime pay.

However, that salary threshold is based on an assumption of the skilled work you perform, and the qualifications you bring to the job. A job based on 40 hours a week. Combined with those skills and qualifications, such a level of pay appears fair and realistic.

But how does that amount stack up at the end of a workweek during which you put in 50, 60 or even 70 hours? Such an infusion of time is not uncommon when on deadline for a project, or when working bugs out of software.

Suddenly, your minimum salary that allows your employer to escape from the need for paying you overtime, when factored across 70 hours, is not that lucrative.

Did lawmakers factor that in, when considering the change? Most salaried employees are managers or executives—people who are in a supervisory roles, and not tied to one individual task. Their schedules can often allow flexibility in a way, in which the work required of computer IT professionals, may not.

Thus, was the move to salaried status justified by the type of work involved? Or was it reverse a law that is now on the books. However, employers have in the past the means to an end for lawmakers to make life easier for employers by lowering the overtime exemption threshold, simplifying paperwork and at the end of the day left with fewer people who would qualify for overtime?

The realities for the affected employee can be stark, and startling. The capacity to work an employee virtually an unlimited number of hours could not only have an effect on an individual's health and relationship with a partner or children, but it might also have an impact on the quality of the work. The latter could affect a worker's reputation if, and when he is next on the outside of the job market, looking in.

You can't do your best work, when you're in a perpetual state of exhaustion.

If you have recently seen a change in your California IT overtime exemption status, it would be in your best interests to seek the opinion of a qualified attorney for expert advice with regard to the nature of the work you do, and a determination of your correct exemption status.

It's a little tough to take on an entire state, and been guilty of mass misclassifications in an effort to do an end-run around the regulations, and save themselves some coin.

That's not fair to you.