For an employee to be exempt from overtime under California law, their job must fall into a specific exempt category.
The most common exemptions are for executive, administrative, and professional roles. Employees in these capacities generally qualify if their work meets detailed requirements and they earn at least twice the state minimum wage for full-time employment (40 hours).
For certain exempt categories, however, the Department of Industrial Relations sets increases based on changes to the California Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI). For example, under the Labor Code, certain computer software employees and licensed physicians and surgeons must be paid a statutorily specified rate based on the CPI in order to be deemed exempt from overtime regulations.
According to section 515.5, employees working in the computer software field who satisfy specific conditions will be exempt from overtime regulations. This exemption covers individuals whose primary duties involve intellectually or creatively focused work that necessitates discretion and independent judgment. These employees must also possess a high level of skill and engage in tasks such as programming, systems analysis, and software design.
Effective January 1, 2025, the minimum hourly rate for computer software employees to meet this exemption will be $56.97, with a minimum monthly salary of $9,888.13 (annually $118,657.43).
Similarly, under Labor Code section 515.6, certain licensed physicians and surgeons must be paid a minimum hourly rate. Effective January 1, 2025, that hourly rate is $103.75 to meet the exemption.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
