How Are I.T. Positions Considered Exempt Employment?

A common misconception is that all salaried employees are exempt from overtime pay. However, the exemption rules are more complex than that. One set of exemptions many managers and human resources professionals have questions about are those that apply to various Information Technology (I.T.) or computer-related positions.

Salaried vs. Exempt

The Fair Labor Standards Act of 1938 (FLSA) established a minimum wage and overtime pay of one and a half the normal wage for hours worked over 40 hours in one week. However, certain employees are exempt from both a minimum hourly wage and from receiving overtime pay if they meet certain criteria. This is what is meant by an "exempt employee." Exemption is based both on minimum salary requirements and on requirements surrounding their actual job duties, as well as some specific fields. This includes some computer-related or I.T. professions.

The Society for Human Resource Management (SHRM) explains the basics of being salaried versus being an exempt employee. Salaried employees are paid a set amount each pay period regardless of how many hours they worked, but they can still get overtime on top of that if they are non-exempt. If a salaried employee works a large enough number of hours in one week, their effective hourly rate may fall below the minimum wage in their jurisdiction.

For example, if someone is salaried at ​$23,400​/year, that equates to ​$450​/week, which in turn translates to ​$11.25​/hour, assuming they work a regular 40-hour workweek. However, if this employee works 62 hours in a given week, their effective hourly wage would be just ​$7.14​/hour, which is below the federal minimum wage. The FLSA protects salaried employees in such situations and mandates minimum and overtime wages for them.

This act has since been updated multiple times, including a "final ruling" issued in 2019 that raised the minimum salary requirements for exemptions and set a timetable for continuing to increase them over time. The Sheppard Mullin Labor and Employment Law Blog explains the changes and the considerations and reasoning behind them. This has updated the FLSA "exempt test" for 2019 and beyond, which is a checklist that can help employers determine if an employee is exempt.

Exemptions Applying to I.T. Positions

A number of exemptions can apply to computer professionals and other I.T. positions. These include the computer exemption, the administrative exemption, the professional exemption and the executive exemption. Fact Sheet #17A from the U.S. Department of Labor Wage and Hour Division outlines the basics for all of these exemptions, while Fact Sheet #17E goes into more detail on the exemptions for computer-related occupations.

This last is the one most relevant to I.T. positions. However, not all computer-related occupations are exempt, and it's important to know the difference between exempt versus non-exempt computer professionals. To qualify for the "computer employee exemption," an employee must meet the following specifications:

Non-Exempt Computer Employees

However, there are certain types of computer employees which are not exempt. Employees who manufacture or repair computer hardware are not exempt. Also, employees who must be skilled in computer use or certain software, such as architectural engineers using computer-assisted design software, do not qualify for this exemption.

Another exemption that can apply to someone in the I.T. field is the "professional exemption." This applies to what the FLSA calls "learned professionals" or "creative professionals." However, the computer-related exemption is not a subset of the professional exemption. The learned professional exemption rarely applies to I.T. professionals, despite the specialized skill and advanced degrees of many in the field. Instead, this exemption most commonly applies to professions such as medicine, science, law or teaching.

However, the creative professional exemption may apply to employees such as user-interface designers or user-experience architects. To qualify for the creative professional exemption, an employee must be salaried at at least ​$684​ per week (there is no hourly alternative).