California Labor Code Section 515.5 provides that certain computer software employees are exempt from the overtime requirements stipulated in Labor Code Section 510 if certain criteria are met. One of the criteria is that the employee’s hourly rate of pay is not less than the statutorily specified rate, which the Department of Industrial Relations (DIR) is responsible for adjusting October 1st of each year to be effective on January 1st of the following year by an amount equal to the percentage increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers.
The DIR has announced that it has adjusted the computer software employee’s minimum hourly rate of pay exemption from $56.97 to $58.85, the minimum monthly salary exemption from $9,888.13 to $10,214.44, and the minimum annual salary exemption from $118,657.43 to $122,573.13 effective January 1, 2026, reflecting the 3.3% increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers.