We recently received a question regarding whether an employer could classify certain IT employees as exempt under the Computer Employee exemption. With the long-awaited final DOL overtime rules for the white collar exemptions yet to make their appearance, we thought this would be a good opportunity to switch gears and remind you of the general requirements for meeting the Computer Employee exemption.
Fortunately, the Computer Employee exemption doesn’t bear the brunt of the proposed changes to the overtime rules for white collar exemptions. Although those Computer Employees who are paid on a salary basis must be paid the anticipated $970 per week to qualify for the exemption, unlike Executive, Administrative, or other Professional employees, they are not absolutely required to be paid on a salary basis. Instead, these employees may be paid hourly if they are paid at least $27.63/hour. Assuming a 40 hour workweek, this comes out to $1,105.20/week, well over the anticipated $970/week requirement. This rate was not changed by the proposed rule, and will therefore likely remain in tact.
We recently received a question regarding whether an employer could classify certain IT employees as exempt under the Computer Employee exemption. With the long-awaited final DOL overtime rules for the white collar exemptions yet to make their appearance, we thought this would be a good opportunity to switch gears and remind you of the general requirements for meeting the Computer Employee exemption.
Fortunately, the Computer Employee exemption doesn’t bear the brunt of the proposed changes to the overtime rules for white collar exemptions. Although those Computer Employees who are paid on a salary basis must be paid the anticipated $970 per week to qualify for the exemption, unlike Executive, Administrative, or other Professional employees, they are not absolutely required to be paid on a salary basis. Instead, these employees may be paid hourly if they are paid at least $27.63/hour. Assuming a 40 hour workweek, this comes out to $1,105.20/week, well over the anticipated $970/week requirement. This rate was not changed by the proposed rule, and will therefore likely remain in tact.
Aside from compensation, employees who want to qualify for the Computer Employee exemption must meet two additional elements:
First, the employee must be employed as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer field.
Second, the employee must have as his or her primary duty or job function one or more of the following:
- The application of systems analysis techniques and procedures, including consulting with users to determine hardware, software, or system functional specifications;
- The design, development, documentation, analysis, creation, testing or modification of computer systems or programs based on and related to user or system design specifications;
- The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or
- A combination of the duties mentioned above if the same skill level is required for the performance of such duties.
A common mistake employers make is to classify their entire IT department as exempt. Such an across-the-board classification is not the best course of action for a number of reasons, including:
- Classification of a job is an individual analysis and employers should steer clear of classifying entire groups or departments without an individual analysis of these employees’ actual duties.
- The Computer Employee exemption was intended to only cover programmers, engineers, and similar positions of the same skill level. Consequently, a number of your everyday IT employees likely will not meet this exemption.
