IT Giveth, IT Taketh Away…

Sacramento, CAYou can forgive any California software developer, or computer professionals in general for feeling taken advantage of by their state legislators, and their apparent pandering to employers and special interests. How else can one explain the lost ground suffered by the California computer professional that puts in long hours, but is taking home less?

Over the years computer professionals in California have made great strides in their compensation packages. And why not? Software (and hardware) is what makes the world go 'round these days, and anyone in the computer industry will tell you that long hours are the norm. In many places there is a 'siege' mentality, where employees will bunk in for the night, perhaps not even see the light of day for days, while trying to fix a software glitch or eradicate an elusive bug.

Overtime exemption clauses, which excuses an employer from paying IT overtime to an IT professional, was only allowable if the employee made a minimum of $49.77 per hour (adjusted for inflation). Based on a 40-hour week such a wage translates to $103,521.60 per year. Not a bad take-home packet, although you worked long and hard to earn that paycheck. Still, regardless of the number of hours you put in, the people working at fast food restaurants would have a hard time believing that a person could earn overtime above such a threshold.

Then came 2008, and everything changed. State legislators in California significantly lowered the threshold to $36 per hour, or $74,880 per year based on a 40-hour workweek. Now, if you were making $74,880 per year you could be considered exempt from collecting overtime. Let's say you were making $80,000 as of Christmastime in 2007. You still qualified for IT overtime, if you worked it.

According to the threshold that came into effect January 1st of last year, you no longer were.

But there was a caveat: the requirement to track salary based on hours in a week. Thus, based on you making $36 an hour, you would be exempt from overtime. Yes, but that was based on a 40-hour week. What if you worked 50 hours? Sixty hours? Suddenly, you're making a lot less than $36 per hour. You've just dropped below the exemption threshold by a substantial margin.

The hourly threshold, therefore, made it tough for employers to trigger the exemption—and made it easier for you to file an unpaid overtime claim.

Then came September 30th of 2008, when legislators in the state of California made yet another change. This time, it was the adoption of a minimum salary threshold of $75,000 annually. The hourly requirement was dropped. The business community considered this a 'welcome change', because it eliminated a 'significant timekeeping burden.'

It also eliminated the chance for employers to be faced with claims for unpaid overtime on the part of computer professionals, not to mention claims for missed meal breaks and rest periods, among others.

What it also eliminates, it appears, is for your chance to trigger an overtime claim if your actual, hourly rate based on the number of hours worked, falls below $36 per hour.

With the change, the minimum annual salary is $75,000 or $6,250 per month. You can be paid more, but that's the minimum. And for that, the employer does away with any overtime claims. He no longer has to track your hours for overtime computation purposes, and he no longer has to pay you overtime, period—regardless of how many hours you work in a day, in a week or in a year.

In other words, it appears as if your employer can work you 40 hours in a week, 50 or even 60 hours. Yet as long as you're making the new minimum of $75,000 per year or $6250 per month, you will not see an extra dime for your efforts. You, my friend, are exempt without a leg to stand on.

This change has been described as 'attractive' to the business community, and that the $75,000 annual salary is held as a fair wage for all hours worked within any given year, regardless of the total hours worked.

Do the math. What's $75,000 per year based on 50, or 55 hours in a week? How much is that per hour? It is certainly not attractive for you.

Without the capacity to claim overtime, your only course of action is to resist working any overtime above 40 hours in a week without some iron-clad guarantee from your employer that you can take an equal amount of time off in lieu.

Either that, or invest in a session with a qualified attorney who can put before you what options are available. For computer professionals, overtime options are becoming scarce, and fair compensation for the California software developer is harder to come by. If you're a California computer professional, and you're looking for answers in this new regulatory world, seek out a lawyer who can best advise you of your options.