Overtime Advisor : New York Employment Lawyer & Attorney : Greenwald Doherty Law Firm : NY Wage & Hour & Discrimination : Overtime Advisor Law Blog

Under the present overtime laws, computer employees are exempt from overtime if the following conditions are met:

1. The employee is compensated either on a salary or fee basis at a rate not less than $455 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour;
2. The employee is employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below;
3. The employee’s primary duties consist of;

·        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 design, documentation, testing, creation or modification of computer programs related to machine operating systems; or

·        A combination of the aforementioned duties, the performance of which requires the same level of skills. 

The proposed new law seeks to expand the computer professional overtime exemption “to those whose job duties include securing, configuring, integrating and debugging computer systems[.]” The new law will also cover  those who direct the work performed by individuals in the industry as well as professionals involved with hardware who are not currently covered. These changes in the new proposed Computer Professionals Update Act, as well as its catch-all clause leaving the door open for further inclusion, make it more difficult to presume overtime eligibility for computer employees under the current standard which only exempts from overtime pay those who fit in the categories described, above.

The bill has received bipartisan support from lawmakers concerned with the overseas flow of high-tech employment opportunities.  At present, many multi-national employers are apt to outsource their high-tech work to countries with less restrictive or non-existant labor laws. By broadening the scope of who qualifies as an overtime exempt employee in computer fields, the hope is that American workers can remain competitive for these positions.  This bill is currently in committee.  

Employers in the high-tech industry should keep track of this bill’s progress as it has the potential to affect both their payroll commitments and the way they schedule and staff projects.

Many employers used to think that all employees working with computers fell into the “Exemption for Employees in Computer-Related Occupations” under the Fair Labor Standards Act (“FLSA”).  However, employees who are using computers or providing services to support computer use are not necessarily exempt from overtime pay requirements. As to an computer professional under federal law, employees must satisfy all of the following criteria:

• Earn a salary of at least $455 per week or  a wage of $27.63 or more per hour
• Be a skilled worker, such as a computer systems analyst, computer programmer or software engineer
• Be primarily responsible for systems analysis, computer design, support of computer programs related to machine operating systems, or skills related to the foregoing or a combination of these skills

Employers make a mistake when they assume that someone who is supporting computer use within their organization is exempt from overtime pay requirements (although it is still possible that the person qualifies for another exemption, such as the administrative exemption). Similarly, employees who repair computers may not be deemed exempt either.  Even if employees are highly paid or have job titles which sound exempt, they are still not exempt unless they are performing highly skilled work that satisfies the DOL criteria. For instance, technical support or helpdesk employees whose primary responsibilities are to set up computers for new employees and install software updates and patches will likely not be considered to be exempt from overtime pay requirements. 

Of course, it is important that employers have an overtime analysis done and properly classify all of their workers in order to avoid costly claims, penalties and attorneys’ fees. This is even more true with computer workers, who are often well-compensated. With significant base salaries, any claim for overtime pay can add up quickly, especially if the claim turns into a class action that encompasses multiple employees.

Employers in California need to be even more cautious. Employees subject to inconsistent federal and state overtime laws get the benefit of whichever law is most favorable. California, nor surprisingly, has very employee-friendly laws, including on the subject of exemptions for computer workers. Indeed, there are plaintiffs’ side law firms that have set up shop specifically to help California-based employees sue their employers, and they are doing so for big money.  Employers, be careful out there!