Effective January 1, 2018, California’s Department of Industrial Relations will begin imposing new rates for the computer software employee exemption and the licensed physician and surgeon exemption to reflect a 2.9% increase in the California Consumer Price Index (CCPI) for Urban Wage Earners and Clerical Workers.

To be exempt from overtime requirements, a computer software employee’s rates have increased as follows:

  • Minimum hourly rate:  From $42.35 to $43.58
  • Minimum monthly salary:  From $7,352.62 to $7,565.85
  • Minimum annual salary:  From $88,231.36 to $90,790.07

The minimum hourly pay for licensed physician and surgeon exemption has increased from $77.15 to $79.39.

Relatedly, the professional, executive and administrative exemptions will also be subject to change after the minimum wage increase takes effect on January 1, 2018.  To qualify as exempt under these classifications, employees must be paid at least two times the state minimum wage in addition to meeting the other exemption criteria.

Bryan Cave LLP has a team of knowledgeable lawyers and other professionals prepared to help employers assess their minimum wage and employee classification obligations. If you or your organization would like more information on California’s minimum wage requirements or any other employment issue, please contact an attorney in the Labor and Employment practice group.