Update Applicable to:
All employers of computer professionals and/or licensed physicians in California.

What happened?
On October 14, 2022, the California Department of Industrial Relations (DIR) released the new rate changes for computer software employees and licensed physicians and surgeons for 2023.

What are the details?
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 is 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.

Remember, 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 primarily engaged in performing duties for which licensure is required 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.

For more information, please see the links below:

Computer Software Employees Exemption

Licensed Physicians and Surgeons Exemption

California Consumer Price Index (CCPI)

Article 1 – Article 2

What do employers need to do?
Employers should review the links above and adjust their employee’s exemption wages by January 1, 2023.

This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.