California IT Overtime: There May be a Loophole

Sacramento, CA If you are a California IT professional you would be forgiven for feeling victimized as the result of all the recent changes to California Labor Law that impact negatively on you. California IT overtime and the ensuing lost ground, has been the one issue that has galvanized the industry in recent years.

But remember, there is still room for optimism. The September, 2008 update to the California labor law as it pertains to the California software developer still leaves some wiggle room for overtime claims prior to 2008. In other words, the updated statute providing for overtime exemption if you make a gross salary of at least $75,000 per year or $6,250 per month annualized to that $75,000 figure—is not retroactive. Thus, even if you were paid more over the first two-thirds of 2008 and owed overtime for the months prior to 2008, you can make a claim.

Remember also that computer IT professionals are also allowed to claim for retroactive overtime going back four years. That's something else you need to talk to a qualified legal professional about, should you feel that you were denied overtime hours due to improper classification, or simply your employer taking unfair advantage.

But there might be another loophole in the highly restrictive September 2008 overtime amendment…

Bonus and stock options. Are they to be included in the $75,000 annualized gross salary threshold? Or is it a separate item? The answer to that question could also have an outcome as to whether, or not you are entitled to overtime pay according to California labor laws.

A California IT overtime attorney would be in the best position to advise you on that topic. It's worth the call, as you know all too well the ground you have lost in recent years in your compensation thanks to amendments to labor laws that favor the employer, rather than the employee.

In the boom years California software developers and other computer professionals enjoyed both high rates of pay and overtime benefits when a 'crunch' served to ramp up the hours. Some IT professionals were exempt from claiming overtime based on a compensation package substantially above most others in the industry, or due to the performance of a specific type of work considered overtime exempt according to state law.

However, it wasn't long before employers began exploiting and taking advantage of their employees by improperly classifying employees in a bid to get out of paying overtime—an expense that can rarely be adequately forecast from a budgetary point of view.

The state meanwhile fostered its own initiatives in order to help the employer by lowering the overtime exemption threshold. Not only did employers have the opportunity to increase the number of legally exempt employees, they could also reduce overtime budgets by paying out overtime based on a lower rate.

One of the more recent legislative changes was to dramatically lower the exemption threshold even further for computer IT professionals. What was once a figure that hit the triple digits, suddenly the benchmark had become $75,000 or $36 per hour. Expressing the figure in both annualized salary and hourly rate is said to have made the employer responsible for tracking and documenting the number of hours actually worked.

And so the state of California came up with yet anther 'improvement' that effectively removed the need to track hours, period. As of last September the overtime threshold is now expressed in terms of an IT professional making at least $75,000 per year or a gross salary of $6,250 per month—which becomes $75,000 when annualized over the course of 12 months.

Gone is the reference to $36 per hour. For that matter, gone is the reference to hours at all. Put simply, any California computer IT professional who makes at least $6,250 per month in gross income can no longer claim overtime. What's more, without the reference to hours so long as you are making that $75,000 per year in gross income your employer neither owes you overtime, or a standard 40-hour workweek either. The implication is that you can work many, many more hours above 40 as a matter of course and never see an extra dime for your trouble.

All the more reason to seek out a qualified California IT professional attorney in order to source any legal loopholes, or root out any unfairness on the part of your employer which may result in a denial of California IT overtime that should be your due.