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California’s 2022 Salary Threshold for Computer Professionals Announced – and Explained

EverythingHR Staff | 11/02/2021 | Blog

Another one of our clues that the holiday season is upon us is the annual announcement for the California Department of Industrial Relations on the new minimum salary requirement for the computer software exemption and for licensed physicians and surgeons.

To qualify within the salary threshold for computer professionals, in 2022, the minimum hourly rate of pay will increase from $47.48 to $50.00, the minimum monthly salary exemption from $8,242.32 to $8,679.16, and the minimum annual salary exemption from $98,907.70 to $104,149.81.  This is effective January 1, 2022,

For licensed physicians and surgeons, the minimum hourly rate for exempt status will increase from $86.49 to $91.07, also effective January 1, 2022

To read the official notification from the DIR and for a brief overview of the nuances of the computer exemption in CA, please continue to our blog.

There is a lot of confusion surrounding the computer exemption.  While we get an update each year regarding the salary threshold that must be met to qualify, the duties test (which must be met in addition to the salary) can be a lot more nebulous.  As with all exemptions in CA, the determination is not based on the individual’s knowledge, skills and abilities, nor is it based on the individual’s importance or value to the organization.  It is based solely on the actual work the individual does.

Highly Paid Hourly Computer Software Employees Explained

A special exemption from overtime requirements applies to certain very highly paid and highly skilled professional computer employees, even though they are paid on an hourly basis (CA Lab. Code Sec. 515.5). An employee qualifies for this exemption only if all the following requirements are met:

  1. The employee is primarily engaged in work that is intellectual or creative and 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:
  • 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 documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems
  1. The employee is highly skilled and is proficient in the theoretical and practical application of highly specialized information relating to computer systems analysis, programming, or software engineering. A job title must not be determinative of the applicability of this exemption.
  2. The employee’s pay in 2022 will be at least $50.00 per hour; or, if paid on a salary basis, he or she is paid at least $104,149.81 per year in monthly payments of at least $8,679.16, exclusive of board, lodging, and other facilities.

This exemption does not apply to the following employees:

  • Trainees or employees in entry-level positions who are learning to become proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering
  • Employees in a computer-related occupation but who have not attained the level of skill and expertise necessary to work independently and without close supervision
  • Employees engaged in the operation of computers or in the manufacture, repair, or maintenance of computer hardware and related equipment
  • Employees who are engineers, drafters, machinists, or other professionals whose work is highly dependent on or facilitated by the use of computers and computer software programs and who are skilled in computer-aided design software, including CAD/CAM, but who are not working as computer systems analysts or programmers
  • Writers 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 on-screen media, or who writes or provides content material intended to be read by customers, subscribers, or visitors to computer-related media
  • Employees performing otherwise exempt duties for the purpose of creating imagery for effects used in the motion picture, television, or theatrical industry

Below if the DIR’s official announcement on the new rates for 2022

Overtime Exemption for Computer Software Employees

Effective January 1, 2022

California 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 the statutorily specified rate, which the Department of Industrial Relations is responsible for adjusting on October 1st of each year to be effective on January 1st 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.

Assembly Bill 10 (Committee on Budget, Chapter 753, Statutes of 2008) amended Labor Code Section 515.5 effective on September 30, 2008, to extend the exemptions to salaried employees whose annual and monthly salaries are not less than the statutorily specified rates, which the department is responsible for adjusting every October 1st of each year to be effective on January 1st 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. Data used to adjust this figure is summarized in the table below:

Urban Wage Earners and Clerical Workers (all items 1982-84 = 100)

Index August 2020 Index Value August 2021 Index Value % Change from 2020
CCPI 276.751 291.317 5.3%

In accordance with Labor Code Section 515.5(a)(4), the department has adjusted the computer software employee’s minimum hourly rate of pay exemption from $47.48 to $50.00, the minimum monthly salary exemption from $8,242.32 to $8,679.16, and the minimum annual salary exemption from $98,907.70 to $104,149.81 effective January 1, 2022, reflecting the 5.3% increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers.

Overtime Exemption for Licensed Physicians and Surgeons

Effective January 1, 2022

California Labor Code Section 515.6 provides that certain licensed physicians and surgeons 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 fifty-five dollars ($55.00), effective January 1, 2002. The Department of Industrial Relations is responsible for adjusting this pay rate on October 1st of each year to be effective on January 1st 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. Last year, the department adjusted the rate to $86.49, effective January 1, 2021. Data used to adjust this figure is summarized in the table below:

Urban Wage Earners and Clerical Workers (all items 1982-84 = 100)

Index August 2020 Index Value August 2021 Index Value % Change from 2020
CCPI 276.751 291.317 5.3%

In accordance with Labor Code Section 515.6(a), the department has adjusted the licensed physicians and surgeons’ minimum hourly rate of pay exemption from $86.49 to $91.07 effective January 1, 2022, reflecting the 5.3% increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers.