Last week, the Ninth Circuit issued a decision in Solis v. State of Washington, Department of Social and Health Services, wherein it attempted to clarify the learned professional exemption’s "specialized intellectual instruction" requirement. In Solis, the U.S. Department of Labor filed a complaint against the State of Washington, Department of Social and Health Services ("DSHS") wherein it alleged that DSHS had failed to pay overtime to certain of its social workers in violation of the Fair Labor Standards Act ("FLSA"). DSHS argued that the social workers were exempt under the learned professional exemption.
On June 15, 2011, the Ninth Circuit issued its long-awaited decision in Campbell v. PricewaterhouseCoopers, LLP, No. 09-16370 (June 15, 2011). In its ruling, the Ninth Circuit reversed the district court’s holding that unlicensed junior accountants could never meet the professional or administrative exemptions under California law, concluding that there is a triable issue of fact as to both exemptions.
On September 30, 2008, Governor Schwarzenegger approved AB 10, which amends the computer software employee exemption from California’s overtime pay requirements. The bill, which is codified in Section 515.5 of the California Labor Code, is urgency legislation that will take effect immediately. As amended, Section 515.5 will permit California employers to pay certain computer software employees either $36.00 per hour or an annual salary of $75,000 to satisfy the compensation component of the exemption. Significantly, the amendment eliminates the prior requirement that even salaried employees receive not less than $36.00 per hour for all hours worked during each week, which effectively required tracking of these salaried computer professionals’ hours. Under the amended law, employers who choose to pay their computer professionals the requisite salary of $75,000 per year are not required to track those employees’ hours.
California Labor Code Section 515.5 provides that employees in the computer software field who perform specific computer-related duties are exempt from the overtime requirements in Labor Code Section 510. In addition to a duties test, computer professionals must earn a statutorily specified minimum pay rate to be considered exempt. When Labor Code Section 515.5 was initially enacted, an employee had to earn at least $41.00 per hour to meet the exemption. Since its enactment, the Division of Labor Statistics and Research ("DLSR") has adjusted the rate on October 1 of each year by an amount equal to the percentage increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers. This adjustment has resulted in an increase in the hourly rate every year. As of January 1, 2007, the minimum rate for the exemption was $49.77 per hour.
In June 2005, two trial Courts denied class certification on the grounds that common issues did not predominate. In Dunbar v. Albertson’s, plaintiff alleged misclassification of Albertson’s Grocery Managers as exempt employees. While the Court determined that the plaintiff satisfied the acertainability, numerosity, typicality and adequacy requirements of a class action, the Court determined that the plaintiff did not satisfy the commonality or superiority requirements.…
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