California’s Department of Industrial Relations (DIR) announced 2024 rates (effective January 1, 2024) for the computer software employee exemption and the licensed physicians and surgeons exemption.
For the computer software employees’ exemption:
- The minimum hourly rate of pay exemption increased to $55.58 from its previous rate of $53.80;
- The minimum monthly salary increased to $9,646.96 from its previous rate of $9,338.78; and
- The minimum annual salary exemption increased to $115,763.35 from its previous rate of $112,065.20.
For the licensed physician and surgeon exemption:
- The minimum hourly pay increased to $101.22 from $97.99.
These rates are tied to the California Consumer Price Index (CCPI) for Urban Wage Earners and Clerical Workers. The 2024 rate changes reflect the 3.3 percent increase in the CCPI from 2023 — lower than last year’s 7.6 percent increase.
To be classified as an exempt computer professional, an employee must meet certain requirements, including (but not limited to) being:
- Primarily engaged in work that is intellectual or creative;
- Primarily engaged in work that requires the exercise of discretion and independent judgment;
- Primarily engaged in certain duties, such as applying systems analysis techniques and procedures or creating or modifying computer systems or programs;
- Highly skilled and proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming and software engineering; and
- Paid California’s minimum rate of pay or salary as noted above.
Keep in mind that some computer professionals who don’t meet those requirements can still qualify as exempt under one of the other exemptions, such as the administrative or professional exemption.
Additionally, licensed physicians or surgeons who are primarily engaged in performing duties for which licensure is required are exempt from overtime if they’re paid at least the minimum hourly rate set annually by the state.
Remember that California’s minimum wage will also increase on January 1, 2024, to $16 per hour — 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 — the 2024 minimum salary for a full-time exempt employee will be $66,560 per year ($5,546.67 per month) — in addition to meeting all other legal requirements for this exemption.
And, in case wage and hour requirements weren’t already complicated enough, a new law starting June 1, 2024, establishes several new minimum wage schedules for certain health care employees, raising minimum wage rates to either $18, $21 or $23 per hour, depending on the nature of the employer. To qualify as exempt under the new law, covered employees must be paid either 1.5 times the applicable health care worker minimum wage or two times the general statewide minimum wage, whichever is greater.
Fast food employees will also have their own industry-specific minimum wage rate of $20 per hour starting April 1, 2024. Covered exempt fast food employees must be paid two times the applicable fast food worker minimum wage, which is equivalent to an annual salary of $83,200 ($6,933.34 per month).
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? Learn more about how HRCalifornia can help you.
