Start preparing now for 2021! The California Department of Industrial Relations (DIR) has announced the 2021 rates changes for the computer software employee exemption and the licensed physician and surgeon exemption. These new rates take effect on January 1, 2021.
For the computer software employees’ exemption:
- The minimum hourly rate of pay exemption increased to $47.48 from its previous rate of $46.55;
- The minimum monthly salary increased to $8,242.32 from its previous rate of $8,080.71; and
- The minimum annual salary exemption increased to $98,907.70 from its previous rate of $96,968.33.
For the licensed physician and surgeon exemption:
- The minimum hourly pay for licensed physicians and surgeons increased to $86.49 from $84.79.
These rates are tied to the California Consumer Price Index (CCPI) for Urban Wage Earners and Clerical Workers. The 2021 rate changes reflect the 2 percent increase in the CCPI.
A computer software employee must meet certain requirements, such as is highly skilled and proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming and software engineering, to be considered an exempt computer professional. However, even computer professionals who don’t meet those requirements could still qualify as exempt under one of the other exemptions, such as the administrative or professional exemption.
Remember that California’s minimum wage will also increase on January 1, 2021 — this increase will affect the commonly used professional, executive and administrative exemptions. Individuals in these classifications must be paid at least two times the state minimum wage, in addition to meeting all other legal requirements for this exemption.
Katie Culliton, Editor, CalChamber
CalChamber members can read more on the Computer Professional Exemption and the “Exemption for Physicians Paid on an Hourly Basis” on the Professional Exemption pages in the HR Library. Not a CalChamber member? See how CalChamber can help you.
