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Wednesday, January 18, 2012

Computer-Related Occupations Under the Fair Labor Standards Act (FLSA)

Gerald Mayer
Analyst in Labor Policy

The Fair Labor Standards Act (FLSA) sets minimum standards for hourly wages, overtime pay, and child labor. The FLSA requires employers to pay covered employees at least $7.25 an hour and at least one-and-a-half times their regular hourly wage for hours worked over 40 hours a week at a given job. However, the FLSA includes a number of exemptions that exclude certain employees from the minimum wage and overtime standards of the act.

Section 13(a)(1) of the FLSA exempts from both the minimum wage and overtime pay standards of the act any person who is employed in a bona fide executive, administrative, or professional occupation (the EAP exemption). Before 1990, employees in computer-related occupations were exempt if they met the requirements of the EAP exemption.

In 1990, Congress directed the Secretary of Labor to issue regulations that would allow “computer systems analysts, computer programmers, software engineers, and other similarly skilled professional workers” to qualify as exempt executive, administrative, or professional employees under Section 13(a)(1) of the FLSA. The 1990 legislation also directed Congress to apply the EAP exemption to employees in computer-related occupations if they were paid on an hourly basis at a rate of at least six-and-a-half times the basic federal minimum wage. At the time, the federal minimum wage was $4.25 an hour. Thus, hourly computer employees were exempt if they met the job duties test and were paid at least $27.63 an hour. In 1992, the U.S. Department of Labor (DOL) published a final rule that implemented the 1990 legislation. The regulations treated computer employees as professional employees under the EAP exemption.

In 1996, Congress amended the FLSA to add a specific exemption for computer employees. The amendments fixed the minimum hourly wage for computer professionals at $27.63 an hour and included in statute much of the regulatory language from the 1992 regulations that defined the primary duties of computer professionals.

In 2004, DOL issued new regulations that revised the salary and duties tests for the EAP exemption. The regulations also simplified the duties test for computer professionals to reflect the 1996 amendments to the FLSA. Under the 2004 regulations, whether they are paid by the hour (at a minimum rate of $27.63) or the week (at a minimum rate of $455), computer professionals are exempt from the minimum wage and overtime standards of the FLSA if they meet the job duties test provided in regulations.

Employees in certain computer-related occupations are not exempt and must be paid at least the minimum wage and time-and-a-half for overtime. The exemption for workers in computer occupations does not include employees engaged in the manufacture or repair of computer hardware. Employees whose work is highly dependent on the use of computers but who are not engaged primarily in computer systems analysis, programming, or other similarly skilled computer occupations are not exempt. Depending on their job duties, Information Technology (IT) Support Specialists may not be exempt from the minimum wage and overtime standards of the FLSA.

In recent Congresses, legislation has been introduced that would expand the statutory exemption for computer employees to include workers whose job duties include network or database analysis and workers who manage or train employees who qualify for the exemption.

Date of Report: January
10, 2012
Number of Pages:
Order Number: R
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