DIR Releases 2023 Hourly Rates for Computer Professionals, Licensed Physicians

Every year around October, the California Department of Industrial Relations (DIR) releases new rates for the computer software employees exemption and the licensed physicians and surgeons exemption.

Last week, the DIR released the rate changes for 2023. These new rates, which take effect on January 1, 2023, are tied to the California Consumer Price Index (CCPI) for Urban Wage Earners and Clerical Workers and reflect the 7.6 percent CCPI increase.

An employee must meet certain requirements to be classified as an exempt computer professional, 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 below.

For the computer software employees’ exemption:

  • The minimum hourly rate of pay exemption increased to $53.80 from its previous rate of $50;
  • The minimum monthly salary increased to $9,338.78 from its previous rate of $8,679.16; and
  • The minimum annual salary exemption increased to $112,065.20 from its previous rate of $104,149.81.

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.

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. For 2023, the licensed physician and surgeon hourly exemption increased from $91.07 to $97.99.

Employers should also remember that California’s minimum wage will increase on January 1, 2023, increasing hourly rates for the commonly used professional, executive and administrative exemptions. You must pay exempt employees at least two times the state minimum wage in addition to meeting all other legal requirements for the exemptions.

Mike McCluskey, Senior Technical 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.

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