Computer Employee Exemption

Generally, the Fair Labor Standards Act (“FLSA”) requires employers to pay their employees at least the Federal minimum wage for all hours worked and overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours.  29 U.S.C. §§ 206, 207 (LEXIS 2016).  However, certain categories of employees are “exempt” from these requirements.  Relevant to this case, §§ 13(a)(1) and 13(a)(17) of the FLSA provide an exemption for computer system analysts, computer programmers, software engineers, and other similarly skilled workers in the computer field who meet certain tests regarding their job duties and threshold compensation requirements (the “Computer Employee Exemption”).  Id. at ¶ 213.

To qualify for the Computer Employee Exemption, the following test must be met:

1. The employee must be compensated at least $455 per week on a salary basis or paid on an hourly basis, at a rate of not less than $27.63 an hour.
2. The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below:
3. The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;
4. The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user system design specifications;
5. The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or
6. A combination of the aforementioned duties, the performance of which requires the same level skills.

Id. 

The phrase “primary duty” refers to the employee’s “principal, main, major, or most important duty.”  29 C.F.R. § 541.700.  In determining an employee’s primary duty, the courts consider “all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole.”  Id.  The amount of time an employee devotes to exempt work may be a “useful guide” in determining whether the employee’s primary duty consists of exempt work.  Id.  “[E]mployees who spend more than 50 percent of their time performing exempt work will generally satisfy the primary duty requirement.”  Id. 

Importantly, an employee’s job duties, not his job title, are determinative of whether the Computer Employee Exemption applies.  29 C.F.R. § 541.400(a) (“Because job titles vary widely and change quickly in the computer industry, job titles are not determinative of the applicability of the exemption”).  This distinction is critical because, Plaintiffs have erroneously recast themselves as “help desk” employees and rely on authority relating to help desk employees, rather than the authority discussing the kind of high-level, sophisticated work actually performed by Plaintiffs.

In Sethi v. Narod, 974 F. Supp. 2d 162 (E.D.N.Y. 2013), the U.S. District Court for the Eastern District of New York identified several factors considered by the courts to evaluate the applicability of the Computer Employee Exemption, including: 

(1) the volume of data the employee managed; (2) the number of users the employee supported; (3) the type and complexity of the problems that were handled by the employee . . .; (4) the layers of assistance below the employee to handle lower-level or simple problems, including whether there was a helpdesk below the employee to handle routine issues; (5) the skill level of the employee, including certifications held, and the relevance and importance of those skills and certifications in the execution of the job; (6) the level of initiative, creativity, strategy, etc., allowed the employee in the execution of their job responsibilities; (7) the priority of the employee’s work relative to the overall work of the company; and (8) the relation of their role and compensation as compared to other technical employees.