Minimum Wage Goes Up (For Some) Effective January 1, 2012

MINIMUM WAGE FOR COMPUTER PROFESSIONALS

California’s Department of Industrial Relations has announced that the minimum pay required for computer professionals to qualify for overtime exemption in California is increasing effective January 1, 2012.  The increase is 2.5% higher than the current minimum pay rate and requires that these employees be paid at least $38.89 per hour, which translates to a monthly salary of $6,752.19 and an annual salary of $81,026.25.  Employers should note that these minimum pay thresholds are applicable to only to California computer professionals.  The minimum rate of pay under federal law is different (the hourly rate being $27.63 per hour).  Employers with exempt computer professionals in California should review their pay practices to ensure compliance with the increased pay requirements. 

California employers are cautioned that not all employees who work in the computer field qualify for overtime exemption, regardless of how much they are paid.  In order to qualify, these employees (in addition to being paid at least the minimum pay detailed above) must meet very specific duties tests, generally involving programming, software development, as opposed to installation, maintenance, repair, and the like. A description of these duties can be found on the California Department of Labor Standards Enforcement website.  The duties tests under California law are, again, somewhat different than those applied under the federal computer professional exemption.  As such, employers with California computer professionals who are or will be classified as exempt, should carefully review the duties and pay to be sure exempt classification is proper.   

San Francisco’s minimum wage, which currently is $9.92 per hour, is increasing to $10.24 per hour effective January 1, 2012.  This makes San Francisco the first city in the country with a minimum wage in excess of $10 per hour.  The minimum wage increase is tied to a new law passed by San Francisco voters in 2004 which automatically increases the city’s minimum wage in accordance with inflation.  Employers with employees who work more than two hours in a workweek inside San Francisco city limits should ensure their payroll practices are updated to reflect the new minimum wage.