COMP NEWS – The California Department of Industrial Relations (DIR) has announced an increase in the compensation threshold for exempt computer professionals in accordance with the state’s computer professional exemption act. Professionals who fulfill criteria in comupter-related occupations must meet a minimum salary when working in the state.
As inflation continues to rise, so too have the minimum wage thresholds for the California Computer Professional exemption. [1] Indeed, the California Department of Industrial Relations (DIR) published a memo on October 14, 2022, increasing the compensation threshold for exempt computer professionals by 7.6%, compared to the 2022 rates. The compensation rates are adjusted annually to account for inflation according to the California Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers. [2]
To qualify for the California computer professional exemption, starting January 1, 2023, California employers must pay their computer professional employees a salary of at least $112,065.20 annually ($9,338.78 monthly) or an hourly wage of $53.80 every hour worked. [3]
The California exemption differs from regulations under FSLA (Fair Labor Standards Act).
The California test for computer professionals differs from the federal regulations under the Fair Labor Standards Act (FSLA). Under the US Department of Labor (DOL), employees in computer-related occupations must meet a salary of at least $684 per week ($35,568 per year) or an hourly wage of $27.63 per hour to qualify for the federal exemption.
Employers with computer professionals in their workforce across multiple states should consider how they will address pay rates across different states, especially since the new California computer professional exemption salary is now greater than the salary threshold of $107,432 for the federal highly compensated employee exemption, which provides another avenue for exemption outside of California.
To read more about California’s computer professional compensation rates, click here.
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