California Employee Rights Advocate : California Labor Attorney & Lawyer : Southern CA Employment Law : Los Angeles, Orange County : United Employees Law Group

Labor Code Section 515.5 dictates that certain software employees are exempt from overtime pay and Labor Code Section 510 sets forth the minimum that these exempt software employees shall be paid.

It’s Important to first identify who is considered exempt from over time. According to the California Department of Industrial Relations all of the following criteria must be met:

1. The employee is primarily engaged in work that is intellectual or creative and requires the exercise of discretion and independent judgment.
2. The employee is primarily engaged in duties that consist of one or more of the following:

o The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications.
o 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.
o The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.

Next, we can look at the rough road exempt software employees have had over the last decade. In 2000 the minimum salary for an exempt employee was equal to no less than $41.00 an hour. By 2007 it had climbed to equal not less than $49.77 an hour. Unfortunately in 2008 during our economic meltdown, this amount was reduced drastically to $36.00 an hour. There have been gradual annual increases. In fact, effective January 1, 2012 the increases will be no less than $38.89 an hour, or no less than $81,026.25 annually, or no less than$6752.19 monthly.

It’s important to note that although the minimum per hour has been effective since 2000, it was until the drastic decrease in 2008 that California labor laws also made sure that there would be a monthly and an annual minimum requirement. Thus ensuring that the while the employee may not be getting time and a half for all overtime hours worked they would be certain that their pay check would remain at or above the monthly and annual requirements while still meeting the minimum pay per hour.

California labor laws can be confusing and multifaceted if you are a software employee exempt or non exempt it is recommended you contact a California labor law attorney to be certain you are and have been paid properly over the last four years.

If you have any questions about this article or our blog, feel free to call us at:

Long Beach – (562) 256-1047
Los Angeles – (213) 261-0229
San Francisco – (415) 200-0012 or (415) 230-2755
San Diego – (619) 342-1242 or (619) 272-2193

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If you are an IT or computer worker in California, getting your overtime pay has become harder and harder- yet not impossible, if you know the rules of the game.

As of September of 2008 if you are a computer programer or computer designer, if you make more than $75,000 per year, you may not be entitled to overtime pay in California.

In addition, the the restriction above, computer software companies are becoming more and more savvy by creating hundreds and hundreds of job titles in order to make a possible class action seem very small when it comes to numerosity.   In addition, job descriptions in many cases are not reflective of what the actual worker does, and therefore causes additonal problems in litigating for overtime pay.

What are the solutions and how can a worker navigate these issues?

The first solution is to obtain an experienced California labor law attorney. A strong labor attorney can foresee and navigate through many of these pitfalls. Morever, it should be understood that many other non programming type positions such as installers, help desk, and technicians are likely non exempt and entitled to overtime pay and the $75,000 salary does not exempt such workers. Furthermore, when it comes to job descriptions that do not match duties, in most cases, the labor lawyer can access the performance evaluations which indicate what the worker actually did, versus what the job description states they were “supposed to be doing.” This is important in determining whether an employee is exempt or not and therefore entitled California overtime pay or not.

Many computer companies such as IBM, Sun Microsystems, Cisco and Intel, among others, have successfully been sued by California labor attorneys, netting millions of dollars for workers who were misclassified as not entitled to overtime pay.

It is not uncommon for employees in California who are recently laid off to complain of wrongful termination, or discrimination only to find out that their real claim is improper classification and they are in fact entitled to back overtime pay for up to four years pursuant to California labor law. Also, in investigating such violations it is important to also look at past employers, since again, the statute for recovery of overtime pay is up to four years previous to the date the lawsuit is filed.

If you have been working more than 8 hours in a day or more than 40 hours in a week and feel that you may be misclassified as “exempt” and not entitled to overtime pay, it is critical that you talk to a California labor law attorney to review your possible claims.

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In this day and age of a computer driven society a substantial amount of technical expertise is required to handle these complex systems which weave hardware and software together in order to maintain computer systems. Those employees working on the front lines whose primary duty is to respond to breakdowns that occur in the systems must diagnose, troubleshoot and resolve complex problems. The fact that this work can require extensive training is not the key criteria for classifying such an employee as "exempt" from the payment of overtime. According to California Labor Law Attorneys the key interpretation is set forth under federal law under the Fair Labor Standards Act (FLSA). In opinion letter (FLSA 2006-42, dated October 26, 2006) published by the Department of Labor (DOL) this issue is discussed with regards to the job of an IT Support Specialist.

Two possible exemptions are discussed, the administrative exemption and the computer employee exemptions.

In looking at this analysis it is important to keep in mind that both the federal labor laws and state of California Labor Laws require employers to pay nonexempt employees a minimum wage for all hours worked and an overtime premium equal to at least one and one half times the employee's regular rate of pay for all hours worked in excess of forty hours in one week.

ADMINISTRATIVE EXEMPTION

The "white collar" exemptions provide overtime pay exemptions for any individual employed in a bona fide executive, administrative or professional capacity as those terms are defined in 29 C.F.R. Part 541. In order for this exemption to apply not only must the employee devote a majority of his or her time to analyzing, troubleshooting, and resolving complex problems with business applications, networking, and hardware but the employee must be compensated at the rate of at least $455 per week and has, as his or her primary duty, the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers. Additionally, the employee's primary duty must include the exercise of discretion and independent judgment with regard to matters of significance.

In meeting all these requirements most employees are not found to "exercise discretion and independent judgment with regards to matters of significance" because that term requires the making of decisions that have significant impact on the running of the company that the employee works for. As this term is applied it relates in most instances to upper management who set the course of operations and the overall direction of the company.

The fact that the work is complex or highly specialized along technical lines or that the employer will suffer significant consequences or losses if the employee does not perform the job properly does not automatically mean the work is significant to the management or general business operation of an employer. If the employee meets some but not all of these requirements this exemption will not apply and the employee must be paid overtime unless a different exemption applies.

COMPUTER EMPLOYEE EXEMPTION

There is an alternative exemption Under Sections 13(a)(1) and13(a)(17) of the FLSA, in which a computer systems analysts, computer programmers, software engineers, and other similarly skilled workers in the computer field who meet certain tests regarding their job duties are eligible for exemption from both minimum wage and overtime pay as professionals. In order to qualify for this exemption, the employee must be paid on either a salary or fee basis of not less than $455 per week or, if paid on an hourly basis, not less than $27.63 per hour.

Furthermore, this exemption will only apply to employees whose primary duties consist of 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, including prototypes, 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 these duties. Examples of employees who qualify for these duties include computer systems analysts, computer programmers, software engineers, and other similarly skilled workers.

It should be noted that job title alone does not determine the employee's exempt status.

SUMMARY

The rules relating to the various criteria that the employer must meet in order to classify an employee as exempt from receiving overtime. It is important to seek the advice of a California Labor Law Attorney. In many instances initial advice may be given without charge. If there is any doubt the chances are that the position is not exempt from overtime.
 

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In California Quality Assurance (QA) Engineers, often work long hours and are often misclassified as exempt from overtime. Nevertheless, they might be entitled to California QA Engineer Overtime, because the employer has improperly classified employees as exempt when in fact they employee should be classified as non-exempt (hourly), and thus has failed to pay overtime. And In some instances, QA engineers have been classified as independent contractors, meaning the company is not even paying benefits.

More and more, overtime lawsuits are being filed against companies and some have been settled. For instance, Siebel Systems has settled to pay $27.5 million to about 800 software engineers, and IBM is settling $65 million to technical and customer support workers.

A quick Google of quality assurance engineer jobs posted on the Internet found the following tagged onto the job descriptions:

• You will work long hours (possibly some over time up to 10:00 PM);
• Must be willing to work overtime (Aerotek);
• Ability to work overtime as necessary on evenings and weekends (a mobile game company);
• Must be able to work overtime (Net Temps);
• Must be able to work overtime often (Interplace); and
• Willing to work overtime when requested.

Most of these positions are salaried. And chances are, these positions should be non-exempt according to California labor Laws, which means you are entitled to overtime. (Conversely, exempt means you are not entitled to overtime.)

According to the California Labor Code §515.5 (below), the following--a typical QA engineer job description posted by Yahoo--should be non-exempt and it will only be exempt if it meets the salary requirement of $37.94 hourly rate or salary ( based on a 40-80 hour work week) of the minimum monthly and annual exemptions at $6,587.50 and $79,050.00, respectively:

"You will contribute to the design and implementation of test plans, test cases and validation, by creating and using test tools of complex, multi-tier software. You will also interface with other QA engineers, developers, and product managers and operations teams to complete projects. You should possess skills in testing and implementing tests on components written in C++/Perl as well as testing API-based web applications. The ideal candidate should have a proven history and dedication to SQA processes, particularly Agile / Scrum testing and implementation."

If this job description sounds familiar, you are likely entitled to overtime. You should contact a California labor law attorney to find out if you have been misclassified as exempt; if so, you may be entitled to considerable overtime depending on your quality assurance engineer pay and how many hours you worked.

California Labor Code §515.5

(a) Except as provided in subdivision (b), an employee in the computer software field shall be exempt from the requirement that an overtime rate of compensation be paid pursuant to Section 510 if all of the following apply:
(1) The employee is primarily engaged in work that is intellectual or creative and that requires the exercise of discretion and independent judgment, and the employee is primarily engaged in duties that consist of one or more of the following:
(A) The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications.
(B) 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.
(C) The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.
(2) The employee is highly skilled and is proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering. A job title shall not be determinative of the applicability of this exemption.
(3) The employee's hourly rate of pay is not less than forty-one dollars ($41.00) thirty-six dollars ($36.00), or the annualized full-time salary equivalent of that rate, provided that all other requirements of this section are met and that in each workweek the employee receives not less than thirty-six dollars ($36.00) per hour worked. The Division of Labor Statistics and Research shall adjust this pay rate on October 1 of each year to be effective on January 1 of the following year by an amount equal to the percentage increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers.[The strike out text refers to pre-2008 law]
(b) The exemption provided in subdivision (a) does not apply to an employee if any of the following apply:
(1) The employee is a trainee or employee in an entry-level position who is learning to become proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering.
(2) The employee is in a computer-related occupation but has not attained the level of skill and expertise necessary to work independently and without close supervision.
(3) The employee is engaged in the operation of computers or in the manufacture, repair, or maintenance of computer hardware and related equipment.
(4) The employee is an engineer, drafter, machinist, or other professional whose work is highly dependent upon or facilitated by the use of computers and computer software programs and who is skilled in computer-aided design software, including CAD/CAM, but who is not in a computer systems analysis or programming occupation.
(5) The employee is a writer engaged in writing material, including box labels, product descriptions, documentation, promotional material, setup and installation instructions, and other similar written information, either for print or for onscreen media or who writes or provides content material intended to be read by customers, subscribers, or visitors to computer-related media such as the World Wide Web or CD-Roms.
(6) The employee is engaged in any of the activities set forth in subdivision (a) for the purpose of creating imagery for effects used in the motion picture, television, or theatrical industry.

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If you are a computer programmer or software developer in California, you may be under the mistaken assumption that you are unable to collect overtime. The good news is, you may be entitled to overtime pay if you are salaried and work in the computer software industry. Both federal and state law require overtime pay for computer professionals who work over forty hours a week and are not considered exempt. In California, if you are determined to be non exempt you are entitled to daily overtime when working over 8 hours, at time and one half. Additionally, you are entitled to double time when working over 12 hours.

It is not unusual for computer programmers and software developers to work extremely long hours, often up to 60-70 hour a week. Companies often deny the payment of overtime under the mistaken assumption that these employees are considered exempt from overtime.

Whether or not you are able to receive overtime pay is, in part, determined by California Labor Code Section 515.5. This code section defines narrow standards where a computer software professional would be exempt from receiving overtime. If you do not fall within these standards, or another exemption does not apply, then you are in fact entitled to receive overtime. To review the section in its entirety, refer to California Labor Code Section 515.5.

The computer-related exemption contained in this section sets forth various requirements for the exemption to apply. Generally these requirements include:

•  The job title must be very specific, as set forth in the code section. Titles include computer systems analyst, computer programmer, application systems analyst, etc.
•  Employee is primarily engaged in creative or intellectual work that requires discretion and independent judgment.
•  Employee is highly skilled and proficient in theoretical and practical application of specialized information.
• Must be paid at least $37.94 per hour, and not less than $6,587.50 per month.
• Primarily engaged in duties that involve application of system analysis techniques and procedures, design, documentation, or creation of computer systems or programs, software, or hardware for operating systems.

The employer has the burden to prove that you fall into this, or possibly another overtime exemption category. Other exemptions include: executive, learned professional, creative professional, outside sales, highly compensated jobs and physicians & surgeons. All these exemptions however, are fairly specific and narrow. California employers often misinterpret these exemptions to their benefit. The savvy employer will alter job descriptions or pay levels to avoid paying overtime. Unfortunately, employers have had a lot of leeway to interpret these exemptions as they see fit. However, recent California class action lawsuits have been brought by employees on this issue and have prevailed.

How do you prevent from being short changed if you think you should be paid overtime? The key here is for employees to know their rights. Stay current on employment law standards as they apply to you and contact a California labor law attorney. Have an attorney review your specific set of circumstances. You may find that you are eligible for overtime and are even entitled to back pay (up to 4 years in California) for previous overtime earned.
 

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If you are one of the over 200,000 computer software professionals in California, your employer may be short changing you when it comes to overtime pay.  Employers and employees generally assume that salaried professionals are exempt from receiving overtime pay, but this is far from true.  Computer programmers and software developers are generally entitled to overtime pay unless they fall within one of the California exemptions which allow employers to not pay overtime.

To qualify for the “computer professional” exemption, an employee must meet the following requirements under California Labor Code, Section 515.5:

   (1) The employee is primarily engaged in work that is intellectual or creative and that requires the exercise of discretion and independent judgment, and the employee is primarily engaged in duties that consist of one or more of the following:
 

(A) The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications.
(B) 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.
(C) The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.
  

(2) The employee is highly skilled and is proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering.  A job title shall not be determinative of the applicability of this exemption.

In addition, the employee’s rate of pay must be equal to or greater than $37.94 per hour or $79,050 per year and this must be paid in amounts not less than $6,587.50 per month.  On November 3, 2009, the California Division of Labor Standards Enforcement (DLSE) confirmed that these rates remain in effect for 2010. 

It is the employer’s legal burden to prove that ALL of the aforementioned qualifications are met, and that the employee does not fall under another exemption ie. Administrative,

Executive or Professional, then the employee must be paid all overtime.  It is not uncommon for employers to misclassify employees or alter their pay structure in order to avoid legally required overtime compensation.  There are a substantial number of Class Action Cases that have prevailed on this point against the largest Fortune Five Hundred Companies.  This practice typically goes unchecked, because employees rely on their companies to know and follow the law and it is not uncommon that companies do not adequately police themselves.

The best way to counteract attempts by employers to avoid payment of overtime is for employees to know their rights.  If you are a computer professional and believe you may be entitled to overtime, take the time to contact an experienced California labor attorney.  An attorney can provide you with an unbiased evaluation of your situation and may be able to help you collect several years of back overtime pay.  

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California and especially the Silicon Valley has long been the hub of computer and software manufacturing in the United States.

With recent layoffs by Yahoo , Hewlett Packard , Lockheed Martin, and others, IT and computer professionals are facing challenges they have never seen in the past.

With the advent of the H1B workers that are entering this company in droves as well as thousands of jobs that are shipped overseas, the laid off computer employee is having fewer and fewer options.

One saving grace, and a little known part of the California labor law is that most computer and IT employees are in fact entitled to overtime pay.

California computer employees are offered additional protections under California labor code 515.5. , Under this statute, those that meet the definition of a computer software professional ie. Code writers, must be paid the minimum under the law and unless otherwise exempt, are entitled to overtime pay.”

At a time when the bills keep coming in and the income has all but stopped or is just trickling in, computer employees are encouraged to find out If they are entitled to back overtime pay.

Employees in California may look back up to 4 years to determine, if they are, in fact entitled to back overtime pay. Furthermore, if they were misclassified, they could be entitled to not just their back overtime pay, but interest and possibly penalties as well. Knowledge is power.

Strategy:

1. Gather a paystub or W-2
2. Gather one or more performance evaluations or a job description.
3. Tally or estimate the total hours you worked without being paid overtime.
4. Contact a California labor law attorney to assist you in determining if you are entitled to overtime pay.
 

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 It is not uncommon for employees to become discouraged or even hopeless when it comes to proving that overtime pay is due. Since in many cases, employers do not keep time records or the employee is misclassified; i.e. told they are salaried (exempt) and not entitled to overtime pay.

First, the employee must understand that pursuant to Nordquist v. McGraw-Hill Broadcasting Company (1995) 32 Cal.App.4th 555, 562, EVERY EMPLOYEE  IS ENTITLED TO CALIFORNIA OVERTIME PAY unless they fall under an exemption; ie. administrative exemption, executive exemption, professional exemption, salesperson exemption,  or computer software exemption, or another wage order preventing them from receiving overtime pay. The employer bears the burden of proof and it is the employer’s responsibility to prove the employee is not entitled to overtime pay.

The second important principle to understand is that California employers, not employees, must carry the burden of time keeping for all non exempt (employees entitled to overtime pay). For example, Anderson v. Mt. Clemens Pottery Co., (1945) 328 U.S. 680,  supports this assertion. In the event the employer did not keep time records, the courts will rely on the reasonable testimony of the employee.

 That said, should the employer produce a witness or other documentation that refutes the employee’s testimony, the burden of proving overtime, reverts back to the employee. This is where execution of the “Smoking Gun” strategy below is critical.

STRATEGY:

It is critical to immediately begin gathering information if you have an overtime pay claim.

1. Witnesses. Gather witnesses that can testify to the duties you performed and the hours you worked. Your California labor law attorney may wish to get them to sign a declaration if possible.

2. Electronic footprints. Time clock punch ins and outs, if accurate are the easiest to show time worked. When unavailable, obtain computer logins that show work start and stop times.  Also, a garage pass, suite key, register key, on site security camera tape may show time worked. Your California labor law attorney can subpoena all of this information.

3. Phone and electronic communications. Your phone bill, cell phone bill, home computer, pda or office computer, are invaluable sources of showing time worked outside of normal working hours.

4. Vendors and outside associates. When all else fails, get declarations from security personnel, and vendors who witnessed you working early or staying late.

5. Memos, handbooks and performance evaluations. Assemble memos or check in the employee handbook to see if it reveals an employer's attitude towards overtime work; i.e. Memos that make statements such as: "Stay until all work is done" or "do whatever it takes." While this may not be enough to prove your overtime case, this information can help paint a picture of the employer's attitude towards overtime to a judge or jury. Also, performance evaluations sometimes praise an employee for working excessive hours.

In addition to proving your case in court, if necessary, in many instances the gathering of these “smoking guns” may help to bring your case to a faster settlement without going to trial.

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