2018 Exempt Classification Rate Changes

In order for an employee to be exempt from overtime pay, certain requirements must be met. One of those requirements is related to the employee’s hourly rate of pay. The required minimum rate for exemption is determined annually on October 1st by the California Department of Industrial Relations (DIR). The DIR uses the analysis of the California Consumer Price Index for Urban Wage Earners and Clerical Workers (CCPI) to determine any needed changes.

On October 1st, 2017 the decision was made to increase the rates for the computer software employee exemption and the licensed physician and surgeon exemption. This decision was based on the CCPI for the period of August 2016 to August 2017, which reflected an increase of 2.9%.

Therefore, effective January 1st, 2018, the rates for the computer software employee exemption and the licensed physician and surgeon exemption increase by 2.9%.

To learn more about these changes, and to view the new rates, please visit the following links:
Rates for computer software employee exemption: click here
Rates for licensed physician and surgeon employee exemption: click here
Additional Information: New 2018 Exempt Classification Rates – CalChamber

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Disclaimer:  These materials are provided for informational purposes only and are not intended as legal or tax advice.  Readers of the IBS Blog should contact their legal or tax professionals to discuss how these matters relate to their individual circumstances.

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