Overtime Pay Laws for Tech Workers
If you are an information technology (IT) worker, also known as a computer IT worker, you probably have a demanding job. Despite the nature of your work, your employer may consider you to be exempt from overtime pay. But are you? Overtime exemptions are strictly defined by the government but often incorrectly applied to workers. Even if you are paid a salary or have a certain job title, you may be entitled to overtime. If you have questions about your wage and hour rights, we have answers.
Overtime Basics in the United States
The Fair Labor Standards Act, or FLSA, sets the basic wage and hour requirements for all workers in the country. States and local governments are free to enact laws that give additional rights to workers, but those laws must at least meet the federal minimum.
Most hourly workers in the United States are required to be paid overtime for any hours in excess of 40 during a week. Overtime is 1.5 times an hourly worker’s regular rate of pay, which is why it is often known as time and a half. Every work week stands on its own, meaning that employers cannot average hours across multiple weeks to reduce the total number of overtime hours.
Employers use a number of other schemes to avoid paying overtime, many of which are common to all industries. But IT professionals face their own unique hurdles to fair pay. They often work long hours but are told by their employers that they do not have to be paid overtime. Because most IT tasks do not meet the necessary standards for exemptions (see below), there’s a good chance you should be paid overtime for these excessive hours.
Common Ways IT Workers Are Denied Overtime
If you are an IT professional, you may encounter some specific objections from your employer if you request overtime. These are a few of them:
You’re an independent contractor. Many IT professionals are hired as independent contractors. And while the independent contracting system is legal, there are numerous workers who are actually employees. If the following apply to you, there’s a good chance you should be treated as an employee who deserves overtime pay:
- The company you work for directs and controls your work
- The company provides the tools you use
- You have set earnings
- You provide services that line up with what the company does
- You have not invested in the business you perform (independent contractors generally bear some financial burden in their work)
- You have a traditional employer-employee relationship with the company you work for
You’re paid a salary. Although most people associate overtime pay with hourly workers, even if you aren’t paid hourly you may still be entitled to time and a half if you work more than 40 hours in a week. For example, just because you are paid a salary does not automatically mean you are exempt from overtime (and, therefore, that your employer isn’t required to pay it). The same goes for any other non-hourly pay rate, such as a day rate or weekly pay.
What matters most is the nature of your job, which is particularly relevant to the common exemptions (discussed below) that are often misapplied to IT workers.
Your employer claims (incorrectly) you are exempt. The FLSA lists several categories of workers who are exempt from overtime compensation. Employers frequently claim one of these exemptions in combination with paying a salary. They believe, inaccurately, that paying a salary and categorizing an employee under one of these exemptions is all they need to do to avoid having to pay time and a half.
The important thing to understand about these exemptions is that the actual job duties – not the fact that a salary is paid or even the job title – will determine whether an employee is exempt. These are the criteria that must be met for each of these exemptions to apply:
- The employee must be paid either on a salary or fee basis at a rate of not less than $684/week or, if paid on an hourly basis, at a rate of not less than $27.63/hour;
- 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; and
- The employee’s primary duty must consist of:
- The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications;
- 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;
- The design, documentation, testing, creation, or modification of computer programs related to machine operating systems; or
- A combination of the aforementioned duties, the performance of which requires the same level of skills
- The employee must be paid on a salary or fee basis at a rate of not less than $684/week;
- The employee’s primary duty must be performing office or non-manual work that is directly related to the management or general business operations of the employer or the employer’s customers; and
- The employee’s primary duty must include the exercise of discretion and independent judgment with respect to matters of significance (which refers to how important or consequential the work is to the company)
- The employee must be paid on a salary basis at a rate of not less than $684/week;
- The employee’s primary job duty must be managing the business enterprise or managing a customarily recognized department or subdivision of the business;
- The employee must regularly direct the work of at least two other full-time employees or their equivalent; and
- The employee must have the authority to hire or fire other employees (or, alternatively, the employee’s hiring, firing, promotion, demotion, and/or advancement suggestions must be given particular weight)
- The employee must be paid on a salary basis at a rate of not less than $684/week;
- The employee’s primary job duty must be the performance of work that requires advanced knowledge; which is, work that is predominantly intellectual in character and requires the consistent exercise of discretion and judgment;
- The advanced knowledge must be in a field of science or learning; and
- The advanced knowledge must be typically acquired by an extensive course of specialized intellectual instruction
Most IT tech job duties do not meet the above criteria, and it’s not enough for the employer to label the worker as an IT engineer, specialist, or architect. If your employer claims you fit one of these exemptions, it’s a good idea to have an attorney review your case.
Your employer incorrectly claims you are exempt under a state overtime rule. Remember, states and local governments can adopt overtime rules that are different from the FLSA as long as they are more beneficial to workers. An example of this is the California rule that concerns exemptions for computer professionals. Because it is more difficult for employers to meet these standards, more workers enjoy the right to overtime pay.
As of January 1, 2023, in California, a computer professional must be paid an annual salary of at least $112,065.20 or more ($9,338.78/month or $53.80/hour). These are substantially higher than the federal rates and are expected to be increased each year. In addition, the employee must spend at least 50% of his or her time performing the criteria listed above for computer professionals. These are some other requirements under California law:
- The worker’s job duties must require the exercise of discretion and independent judgment
- The worker’s job duties must be intellectual or creative in nature
- The worker must be skilled and proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering
Depending on the state you live in, there may be other exemption rules that apply to you which are more advantageous than the FLSA regulations.
If You’re Entitled to Overtime, The Lore Law Firm is Here to Help
Class action lawsuits have been filed across the country by workers who do not meet the necessary elements of either federal or state exemptions. If you have been misclassified as exempt or you are otherwise being denied your right to overtime pay, reach out to The Lore Law Firm. You can complete our client intake form today to get started.