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California, which nurtured Silicon Valley into a global phenomenon, has finally acted to stem the off-shoring of computer jobs by simplifying and reducing the compensation requirement for overtime-exempt computer professionals. The new legislation, contained in Assembly Bill (AB) 10, which took effect on September 30, 2008, as urgency legislation, may also stem the outpouring of computer jobs from California to other states by substantially harmonizing the duties requirements of the overtime exemption with those under federal law and under the laws of most other states.
The Pre-AB 10 Computer Software Professional Overtime
Exemption
According to the most recent estimate from the U.S. Department of Labor’s Bureau of Labor Statistics, there are approximately 218,000 computer engineers, programmers and analysts in the fi elds of applications and systems software employed in California who are entitled to overtime unless they are covered by Labor Code section 515.5’s exemption from overtime payments. Before the enactment of AB 10, the exemption applied only if the following duties and compensation requirements were met:
• The employee’s primary duty is work that is intellectual or creative and that requires the exercise of discretion and independent judgment.
A. The employee’s primary duty consists of one or more of the following:
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 documentation, testing, creation, or modifi cation of computer programs related to the design of software or hardware for computer operating systems.
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