California: Computer Professionals and Licensed Physician/Surgeon Exemption Rates for 2021 Increase

APPLIES TO

All Employers with CA-Based Computer Professionals and Licensed Physician/Surgeons

EFFECTIVE

January 1, 2021

QUESTIONS?

Contact HR On-Call

(888) 378-2456

The California Department of Industrial Relations (DIR) announced the 2021 exemption rates for certain types of employees.  To qualify as exempt from minimum wage and overtime requirements, employees in these professions must meet certain requirements, one of which includes a compensation threshold.

For computer software employees, the compensation threshold is as follows:

  • Minimum hourly rate of $47.48 (increased from $46.55);
  • Minimum monthly salary increased to $8,242.32 (increased from $8,080.71); and
  • Minimum annual salary increased to $98,907.70 (increased from $96,968.33).

In addition to the compensation threshold, computer software employees must also perform certain job duties to be considered exempt, such as applying highly specialized information to computer analysis, programming, and software engineering.

For licensed physicians and surgeons, the 2021 compensation threshold is a minimum of $86.49 per hour (increased from $84.79).

California’s statewide minimum wage will also increase on January 1, 2021, impacting the compensation threshold for the more general professional, executive, and administrative exemptions.  Employees in these categories must be paid at least two times the state minimum wage, in addition to other requirements.

Action Items

  1. Review compensation rates for applicable employees to ensure exemption salary threshold is met.
  2. Have pay rates and payroll processes updated accordingly.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2020 ManagEase

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