POSSIBLE WAGE AND HOUR RELIEF ON THE WAY FOR SOME EMPLOYERS
George F. Brenlla
Recently, the Computer Professionals Update Act was introduced in the United States Senate. This is a rare positive development for employers, as companies would then be more easily able to classify employees as exempt under the existing computer exemption of the federal wage and hour law.
The new legislation would expand the coverage of the exemption to individuals who work in a "computer or information technology occupation, including, but not limited to, work related to computers, information systems, components, networks, software, hardware, databases, security, internet, intranet or websites, as an analyst, programmer, engineer, designer, developer, administrator or other similarly skilled worker." Also, employees who direct the work of individuals performing these duties would be exempt.
This would be a welcome development for many employers if the bill becomes law. Recently, there are many fine lines in determining whether or not the computer exemption applies given the numerous job titles in this field. The employer is forever placed in the difficult position of having to make a judgment call on the exemption question. If it is proven wrong, almost astronomical liability is the result, as these workers are often earning high compensation (whether at an hourly rate or a salary). To take the more conservative approach and simply treat the workers as non-exempt is not the answer either because although it spares the employer the specter of a possible classification lawsuit, it increases overtime pay.
If the proposed legislation becomes law, employers will no longer be forced to make what are now extremely difficult decisions and will be able correctly to classify computer workers without excessive fear over whether they will be hit with a Fair Labor Standards Act collective action for misclassification of computer workers. We will keep continue to monitor the progress of this legislative development.
This Update is not intended to be legal advice, but rather is intended to inform the reader of problem areas and recent developments in labor and employment law. If legal advice is required concerning a particular matter, your attorney should be consulted.