Exempt FLSA Classification for Computer Employees

Thursday, June 03, 2010

The Fair Labor Standards Act (FLSA) provides a special exemption from both the minimum wage and overtime provisions of the law for “computer” employees. To meet the “facts and circumstance” test for FLSA, the employee or position must satisfy all aspects of the test. The standard method of analysis for determining if the employee or position meets the threshold is to:

1. Review the written job or position description, if available.
2. Interview the incumbent employee(s), if available.
3. Interview the immediate supervisor or manager of the employee
    or position.
4. Compare and contrast the findings from the job or position
    description and/or interviews with the exemption criteria.

Exemption Criteria for Computer Employees

1. The employee must be compensated either on a salary or fee basis
    (as defined in the regulations) 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 must be 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 duty must consist of:

  a) The application of systems analysis techniques and procedures,   
       including consulting with users, to determine hardware, software
      or system functional specifications;

  b) 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;
 
  c) The design, documentation, testing, creation or modification
      of computer programs related to machine operating systems;

or

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

As an analyst, you should be careful not to draw any conclusions associated with an employee’s job or position title. Rather, examine the work performed, the conditions under which the duties are carried out, the results or output of the work effort, and the type and level of directions given to the employee. Provided the incumbent employee(s) or position meets the exemption criteria for computer employees as published by the US Department of Labor, the employee(s) or position will be exempt from Federal minimum wage and overtime provisions of FLSA.

Remember, exemption from Federal minimum wage and overtime provisions of FLSA DOES NOT automatically provided for an exemption State or local wage and hour laws. When dealing with Federal, State or local wage and hour laws, it is best to consult with a qualified labor law professional.