Hello pilo,
Thank you for your question. As I am sure you are aware, I am not a
lawyer or tax accountant or other professional offering professional
advice. Google Answers research is not a substitute for professional
council as you will note in the disclaimer at the bottom of the page.
However, that being said, I searched [california +overtime law
+salary] to uncover the following information for you:
An article at the American Institute of Architects has a good
explanation of this law:
http://www.aiacc.org/advocacy/overtime.html
Overtime in the New Millennium: How the "8-hour day Restoration &
Workplace Flexibility Act" may impact your firm
By Douglas J. Melton, Esq.
"In the late 1990s, the California Industrial Welfare Commission
overhauled the rules for calculating California employees' entitlement
to overtime. The "old" 8-hour day rule (first passed in 1911) -- which
said employees were entitled to overtime pay whenever they worked more
than 8 hours in a day -- was abandoned. The "new" rule imposed the
40-hour workweek as the benchmark. So long as an employee did not work
more than 40 hours per week, overtime pay was not required regardless
of the number of hours the employee worked during a given day.
In 1999, the California Legislature did an about-face. Declaring that
"the 8-hour workday is the mainstay of protection for California's
working people," and linking "long work hours" to social ills such as
the breakdown of the family and increased rates of accident and
injury, the legislature passed AB 60, which largely restores the
pre-1998 8-hour workday rule. The new law, dubbed the "8-hour Day
Restoration & Workplace Flexibility Act of 1999," takes effect on
January 1, 2000..."
The article continues with details of the law and then arrives at the
points that most pertain to your question:
"The new law does not apply to everyone.
Importantly, three categories of employees are not covered by these
rules:
1. "Exempt" employees (discussed below);
2. Employees working an approved alternative workweek (also discussed
below);
3. Union Employees with collective bargaining agreements that pay
premium rates for overtime and at least 30% more than the state
minimum wage.
Exempt Employees
Certain California employees have always been "exempt" from overtime
pay and other wage and hour regulations. Whether an employee is exempt
turns on two factors: the nature of their duties and the amount of
their pay.
The duties test
Employees who perform work that is "primarily intellectual, managerial
or creative," and which requires the exercise of "discretion and
independent judgment" are exempt. Essentially, this definition means
executive, administrative or professional employees. Professionals,
such as architects or other persons providing similar design services,
are almost always considered exempt. Support staff, in contrast, are
almost never considered exempt.
The salary test
Exempt employees must also be salaried -- paid a guaranteed minimum
amount for every week in which any work is done, regardless of the
number of hours worked or the quality of the work. That salary can be
reduced only for limited reasons, such as illness or vacation, and
then only in full day increments. Exempt employees cannot be paid on
an hourly basis.
Currently, the minimum salary requirement for exempt employees is
between $900 and $1,150 per month (depending on the applicable wage
order). Under the new law, the monthly salary requirement will go up
and will be tied to the minimum wage. Exempt employees will be
required to be paid at least twice the minimum wage for full time work
(i.e., $1993.33 per month, $23,920 per year). As the minimum wage
rises, so will the salary requirement for exempt employees. The salary
change provisions of the new law will not take effect until after July
1, 2000..."
So, based on the salary test, one would only have to be paid
approximately $12 an hour to be exempt. It would seem your figure of
$41 is fictitious, at least in terms of this particular law.
I continued to search other pages, particularly those that might be
specific to computer professionals, as you mentioned.
NetworkWorldFusion speaks to this law:
California Law Creates Pickle
By Paul Desmond
Network World, 07/22/02
http://www.nwfusion.com/you/2002/salary_side.html
"California companies shoulder an extra salary burden with respect to
IT staff. In September 2000, Gov. Gray Davis signed a law stipulating
that only computer professionals making at least $41 per hour were
exempt from the state's overtime pay law. That law says workers must
be paid time-and-a-half after eight hours worked per day, whereas most
other states mandate overtime pay only for workers who put in more
than 40 hours per week..."
How interesting. Here we have the figure you have found.
"The $41-per-hour figure translates to an annual salary of $85,280 for
a 40-hour week, which, of course, is rare."
"People in our industry don't work eight-hour days," says Edmund Hung,
network director for Guitar Center in Westlake Village, Calif. "We've
had to bring people within our organization up to the $85,000 level to
avoid paying them overtime."
That includes LAN administrators and PC technicians who previously
earned anywhere from $68,000 to $75,000, he says. One Guitar Center
LAN administrator whose base salary was too far from the $85,000
plateau to justify a pay increase to that level is now pulling in far
more than that rate, at $130,000 per year, because of overtime. Now
management wants to increase his base salary to $85,000, but the
employee doesn't want to take the increase because he knows he'll lose
out in the long run. "It becomes a tug of war between management and
the employee as to what we should agree on," Hung says, noting the
fight is not yet over. "It's going to be nasty."
Well, now I am totally confused. Obviously both of these statements
can not be correct. My inclination is more to believe the legal
professional rather than the reporter, but knowing Guitar Center
management for years having been in that industry, I am reasonably
sure they did their homework before raising salaries.
I continued to uncover numerous legal briefs at pages that echoed the
first opinion that twice minimum wage was enough to disqualify an
exempt employee from overtime wages. But then I found more supporting
evidence for the $41 hr exemption at:
How to Determine Who Must Be Paid Overtime In California
William H. Truesdell
Copyright 2001 - The Management Advantage, Inc.
Last updated: April, 2001
http://www.hrwebstore.com/products/overtime-exempt.html
..."Some jobs are EXEMPT from these overtime payment requirements.
The rules governing exemptions are very narrowly interpreted by the
Labor Commissioner and you should be careful not to apply them
incorrectly. It could be an expensive mistake.
EXEMPT means the employee is NOT subject to payment for overtime hours
worked. Employer policy may elect to compensate incumbents in these
jobs for their overtime, but there are no restrictions on rates used
or quantity of hours paid to exempt job incumbents.
Overtime requirements apply to the JOB not the EMPLOYEE. It is the
responsibility content of the job that determines if incumbent
employees must be paid for the overtime they work.
There are five categories of exemption from overtime requirements
under the Fair Labor Standards Act (FLSA) and Industrial Welfare
Commission (IWC) Orders...
5. Computer-Related Occupation Exemption (See Footnote #3)
Effective September 19, 2000, computer professionals paid on an hourly
basis rather than by salary may be exempt from overtime under a
California law known as S.B. 88 (Labor Code Section 515.5). To be
exempt, the job (not the incumbent) must meet several tests, including
...
-Commonly involves job titles such as computer programmer, systems
analyst, computer systems analyst, computer programmer analyst,
applications programmer, applications systems analyst, applications
systems analyst/programmer/software engineer, software specialist,
systems engineer and systems specialist.
-Primarily engaged in intellectual or creative work that requires the
exercise of discretion and independent judgment.
Highly skilled and proficient in the theoretical and practical
application of highly specialized information to computer systems
analysis, programming and software engineering.
-Paid at least $41 per hour (an amount which may be adjusted each
year).
-Primarily engaged in one or more of the following duties:
The application of systems analysis techniques and procedures
(including consulting with users) to determine hardware, software or
system functional specifications; or
The design, development, documentation, analysis, creation, testing or
modification of computer systems or programs (including prototypes)
based on and related to, user or system design specifications; or
The documentation, testing, creation or modification of computer
programs related to the design of software or hardware for computer
operating systems..."
"If you have employees who perform exempt functions part of the time
and non-exempt functions for the balance of the pay period, any time
worked on non-exempt activities must be compensated for overtime if
appropriate."
They noted Footnote 3 applied to this:
"FOOTNOTES:
1. "Minimum Salary Test" The minimum salary level for exempt white
collar employees according to A.B. 60 is "no less than two times the
state minimum wage for full time employment." "White collar"
exemptions refer to the executive, administrative and professional
exemptions specified in the Fair Labor Standards Act (FLSA). Computing
the minimum salary level for January 2001 we do the following: Current
minimum wage = $6.25 per hour X 2,080 hours in a year = $13,000,
multiplied by 2 times the minimum wage = $26,000 divided by 12 months
= $2,166.67 per month minimum salary requirement for exemption status.
On January 1, 2002 the minimum salary requirement will increase to
$2,340.00.
2. The Industrial Welfare Commission has been directed by the state
Legislature to review wages, hours and working conditions of outside
salespersons, and may change the regulations regarding their
exemptions from overtime by July 1, 2000.
**************************************************************
3. The old federal compensation test for this group of jobs was a pay
rate at least 6.5 times the federal minimum wage. That has been
replaced with a minimum hourly rate of $27.63. State law requirements
are substantially different and are indicated in the bulleted section
of this category.
**************************************************************
So, I am now feeling more confident your information is correct. It
appears overtime is defined by the POSITION and not by the EMPLOYEE.
And if this job category previously became exempt at 6.5 time the
minimum wage, $41 as a new minimum is not far fetched.
A cached page at Google also notes the new $41 per hour rate required
for these jobs to reach exemption:
http://216.239.53.100/search?q=cache:KVwTmnFlvGkC:www.gcwf.com/articles/elu/eluSummer_00_2.html+california+%2Bovertime+law+%2Bsalary+%2Bcomputer&hl=en&ie=UTF-8
Just to go one step further, I searched combinations of [S.B. 88
(Labor Code Section 515.5)] to see if I could find the text of the
law.
I believe I found the horse's mouth here at a pdf file on the State of
California web site:
http://www.dir.ca.gov/DLSR/CPI/OTCPI.pdf
In a memo from David C. Aroner, Department of Labor Statistics and
Research Chief, to Chuck Cake, Acting Director, Aroner states:
"Labor Code Section 515.5 provides that certain computer software
employees are exempt from the overtime requirements stipulated in
Labor Code Section 510 if certain criteria are met. One of the
criteria is that the employee's hourly rate of pay is not less than
forty-one dollars ($41.00) effective January 1, 2001..."
It goes on to show how this is adjusted each year and for 2003 the
figure is $43.58.
So, I am now convinced this is real. The only caveat I would offer, is
to be VERY SURE that the JOB in question meets the definitions
required to be bound by this $41 per hour exemption. Do check with a
legal professional if you have any questions.
I trust my research has provided you the detail you desired in
interpreting this overtime law. If a link above should fail to work or
anything require further explanation, please do post a Request for
Clarification and I will be pleased to assist further.
Regards,
-=clouseau=- |
