Computer Employees

Computer Employees

Data processing employees may be exempt under any of the "white collar exemptions," as bona fide executive, administrative or professional employees. There are, however, some peculiarities in how these exemptions have been applied to computer employees, and some special rules which apply to "computer professionals."

A "rule of thumb:" While job titles are often misleading, the white collar exemptions for computer employees are typically limited to "programmers" and "systems analysts."

Computer employees as exempt executives. Computer employees may be exempt executives if they are

(a) paid on a salary basis and

(b) their duties are exempt executive duties.

The "regular" duties tests for executive employees may apply to employees who happen to work in the computer industry. Thus, employees' duties will be exempt if they regularly supervises two or more employees and their primary duties are "management" as defined in the Regulations. See, e.g., 29 CFR §541.102.

However, the Regulations provide that a computer employee who "directs the day-to-day activities of a single group of programmers and who performs the more complex or responsible jobs in programming will be considered to have management as his primary duty." 29 CFR §541.103. This regulatory language implies an "alternative" for computer employees to the traditional duties tests for executive employees. The regular duties test for executives requires that an employee be "in charge" of the enterprise or a recognized subunit of an enterprise, and perform typical management duties. The specific computer employee Regulation requires only that a computer employee supervise a particular type of employee (programmers) and actually "do" high level programming work.

Computer employees as exempt administrators. Computer employees may be exempt as administrators if they are paid on a salary basis and also (a) perform work directly related to management policies or general business operations, and (b) exercise discretion and independent judgment on important matters.

As applied to computer employees, "systems analysts" and "programmers" perform work directly related to management policies or general business operations when they "are concerned with the planning, scheduling, and coordination of activities which are required to develop systems for processing data to obtain solutions to complex business, scientific, or engineering problems" of the employer or the employer's customers. 29 CFR §541.205(c)(7).

The Regulations provide that a "systems analyst" [and also, presumably, a "programmer"] exercises discretion and independent judgment when s/he "develops methods to process, for example, accounting, inventory, sales, and other business information by using electronic computers," or when s/he "determines the exact nature of the data processing problem, and structures the problem in a logical manner so that a system to solve the problem and obtain the desired results can be developed," and when s/he "determines exactly what information must be used to prepare the necessary documents and by ascertaining the exact form in which the information is to be presented." 29 CFR §541.207(c)(7).

The following types of computer jobs will not likely satisfy the duties tests for the administrative exemption: Tape librarians, keypunch operators, computer operators, junior programmers, programmer trainees. The following types of computer duties will not generally satisfy the duties tests for the administrative exemption: Preparing flow charts or diagrams showing the order in which a computer must perform operations, preparing operator instructions, running computers, debugging programs. 29 CFR §541.207(c)(7).

There is considerable ambiguity and confusion about the application of the administrative exemption to computer employees.

Computer employees as exempt professionals. Virtually no computer employees satisfy the traditional duties tests for exempt professionals. However, there are special rules permitting some high level computer employees to be treated as professionally exempt even when they do not meet the traditional duties tests for professional employees, and also when they are not paid on a salary basis.

Some highly skilled computer employees will be considered to be performing professionally exempt duties if they perform the following types of work: "application of systems analysis techniques and procedures ... to determine hardware, software, or system functional requirements," "design, development, documentation, analysis, creation, testing, or modification of computer systems or programs ... based on and related to user or system design specifications," "design, documentation, testing, creation or modification of computer programs related to machine operating systems," or some combination of these which require the same level of skills.

These computer professional duties are meant to refer only to highly-skilled employees who "have achieved a level of proficiency in the theoretical and practical application of a body of highly-specialized knowledge in computer systems analysis, programming, and software engineering ... which allows them to work independently and generally without close supervision." As a practical matter, the computer professional exemption is restricted to "systems analysts" and "programmers." The computer professional exemption does not apply to "employees engaged in the operation of computers or in the manufacture, repair or maintenance of computer hardware and related equipment."

Computer employees whose duties qualify them for the professional exemption may be exempt if they are either (a) paid on a salary basis or (b) paid hourly at a rate not less than $27.63 per hour.