The University of Tennessee, Knoxville

Tennessee County Municipal Advisory Service

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Exempt Computer Employee

Reference Number: MTAS-1523
Tennessee Code Annotated
Reviewed Date: July 25, 2017
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(NOTE: The U.S. District Court for the Eastern District of Texas issued a preliminary injunction preventing the implementation of the revised FLSA overtime regulations. The case was brought by 21 states. The Obama Administration appealed the decision to the U.S. Court of Appeals for the Fifth Circuit. The 5th Circuit Court of Appeals granted a motion of the Trump Administration for an additional 60 days to determine its position on the appeal of the ruling by the District Court enjoining the FLSA overtime regulation. The Administration's decision was initially due by May 1st, 2017. The 5th Circuit granted another extension until June 30th.  The Labor Department filed a brief with the Fifth Circuit Court of Appeals indicating that it will not defend the $913 salary rate and asked the Court to clarify its ability to set a salary level.  The department has also issued a request for public comments.  Until we hear more, continue to comply with the old salary level testing regulations.)

Employees who work as “computer systems analysts, computer programmers, software engineers or other similarly skilled workers in the computer field” are eligible as an exempt professional employee. The exemption applies to “any computer employee compensated on a salary or fee basis at a rate of not less than $455 per week and to any computer employee compensated on an hourly basis at a rate not less than $27.63 an hour.” 29 C.F.R. § 541.400(b). Effective December 1, 2016, the minimum salary level will be a rate per week of not less than the 40th percentile of weekly earnings of full-time non-hourly workers in the lowest-wage census region, exclusive of board, lodging or other facility ($913 per week).

The exemption, however, applies “only to computer employees whose primary duty consists of: (1) the application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications; (2) the design, development, documentation, analysis, creation, testing or modifications of computer systems or programs, including prototypes, based on and related to user or system design specifications; (3) the design, documentation, testing, creation or modification of computer programs related to machine operating systems; or (4) a combination of the above, the performance of which requires the same level of skills.“ 29 C.F.R. § 541.400(b)(1-4).

The computer exemption “does not include employees engaged in the manufacture or repair of computer hardware and related equipment. Employees whose work is highly dependent upon, or facilitated by, the use of computers and computer software programs, but who are not primarily engaged in computer system analysis and programming or other similarly skilled computer related occupations also are not exempt computer professionals.” 29 C.F.R. § 541.401.

Computer employees may also be exempt under the Executive and Professional duties exemption if their primary duties includes work such as planning, scheduling and coordinating activities required to develop systems to solve complex business, scientific or engineering problems of the employer of the employer's customers.