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Wednesday, May 20, 2026

California Raises Software Employee Pay Minimums for Overtime ... - SHRM

Beginning Jan. 1, 2024, California employers may have to pay overtime to more computer software employees who earn less than $115,763.35 per year, or $55.58 per hour, or $9,646.96 per month.

On Oct. 1, the California Department of Industrial Relations (DIR) issued new annual adjusted minimum thresholds for computer software employees who are considered exempt from the state's overtime requirements under California Labor Code Section 515.5.

The adjustments raised the minimum annual salary exemption from $112,065.20 to $115,763.35, the minimum monthly salary exemption from $9,338.78 to $9,646.96, and the minimum hourly rate of pay exemption from $53.80 to $55.58.

Section 515.5 provides that employees in the computer software field are exempt from California's overtime pay requirements if they meet certain criteria, including earning a statutory minimum rate.

The DIR is responsible for adjusting those minimums each October, based on the California Consumer Price Index (CCPI) for urban wage earners and clerical workers. According to the DIR, the CCPI for urban wage earners and clerical workers increased 3.3 percent from 2022.

In addition to the minimum pay rate, the computer software employee exemption applies to employees who are "primarily engaged in work that is intellectual or creative and that requires the exercise of discretion and independent judgment," are "highly skilled," and have job duties such as computer programming, systems analysis, or software design and...



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