That's the crux of Bill AB 10, which was changed in the face of intense lobbying by the California computer industry hoping to save some money and bookkeeping grief. It also saves them, it has been reported, from the sting of lawsuits brought by wronged employees claiming they were not paid the overtime that was their due.
Now, with a few exceptions, it's a non-issue. Except, perhaps for the computer professional who will see his workload increase and not receive anything in return save for a pat on the back.The new legislation exempts computer professionals from overtime pay if they earn at least $75,000 each year working in a full-time position, or $6,250 per month.
Advocates of the new law love the idea. "The tracking of hours generally is anathema to the creative and freethinking computer professional employees," the State Assembly's analysis noted. "They claim that if more resources must go to calculate and pay overtime, resources for bonuses, stock options and stock awards will be reduced."
Will there be more bonuses now? Stock options? Stock rewards?
"This is the first time that the Legislature has done a takeaway of the rights of private-sector workers as part of the budget deal," said Caitlin Vega of the California Labor Federation. "We just think it is wrong. We think it will really hurt the groups of workers who will be expected to work through the weekend and not get paid."
Backers of the bill make the point that the average salary for a computer professional working in Silicon Valley is about $90,000. The need to pay overtime, which is a cost virtually impossible to forecast at budget time, was viewed as crippling to the industry. And while computer professionals—and especially software designers—tend to operate in packs as a team, in a loosely-knit environment conducive for maximum creativity and problem-solving, those jobs would have been generally accepted, and terms agreed to based on a 40-hour week.
With AB 10, that's out the window.
Computer professionals are those engaged in computer systems analysis, programming or "another similarly skilled computer-related occupation." Drafters, machinists, engineers generally would not be covered by the exemption, according to the bill.
It's a far cry from the way it used to be. Past legislation required overtime to be paid at time-and-one-half after 8 hours of work in a single day, and double-time after 12 hours. That requirement was re-cast a number of years ago by the state Industrial Welfare Commission, when it adopted the federal standard of paying overtime only after 40 hours were exceeded in any given workweek.
What the new California state labor law does is remove the requirement to track hours. Without the requirement to track actual hours worked, how can overtime be computed?
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Critics of this revision in California State labor law muse that it could backfire on Silicon Valley. Faced with increasing costs of living and falling real estate prices tied to the credit crisis, there is speculation that many computer professionals will view the lost opportunity for earning overtime as the tipping point, and either jump ship for another State, or lobby—or even sue—their employer for an increase in the base rate now that overtime, thanks to the new California labor employment law, is a non-starter. Ironically, this revision in California labor laws was meant, in part, to spare employers potential lawsuits stemming from the overtime exemption. And yet, this revision could have an opposite affect…