Get ready to start dishing out overtime to your techs

Money, keyboard and hand on computer mouse

New rules from the Department of Labor (DOL) could have a big impact on how IT employees are paid overtime – and your company’s bottom line. And before you think, “No one in my department is overtime eligible,” know this: They might be soon. 

A 295-page notice from DOL has increased the pay threshold for who can get overtime.

Before, workers who made at least $23,660 per year ($455/week) didn’t have to be paid overtime if their job duties met certain requirements (more on that later). This is known as being “exempt” or “overtime exempt.”

But under the rule changes, that minimum salary is going to jump to $50,440 per year ($970/week).

In other words, techs who make less than $50,440 a year will have to be paid at a time-and-a-half overtime rate for hours worked over 40 in a workweek. And that change could come as early as next year.

Computer employee exemption

One reason that IT pros often haven’t been paid overtime is that they meet the “Computer Employee Exemption.” According to DOL’s current rules:

To qualify for the computer employee exemption, the following tests must be met:

• The employee must be compensated either on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour;

• 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;

• The employee’s primary duty must consist 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 modification 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 aforementioned duties, the performance of which requires the same level of skills.

This covers many IT employees. So far none of these threshold tests have been changed – only the minimum salary requirements for who qualifies.

That said, DOL is seeking comments on whether there should be changes made to these tests, too.

In that case, you could possibly wind up having to pay techs overtime even if they make more than the $50,440 figure.

‘Always-on’ culture may need to change

IT has always been called on to be available at all times in order to keep things up and running. But even seemingly small tasks like answering emails after shifts or working late on big projects could trigger overtime pay under the new rules.

In the short-term, that means you may want to start tracking techs’ hours a little more carefully in order to determine just how many hours employees are putting in. Timekeeping systems like clocking in and out that wasn’t necessary for salaried techs before could be a good way to get a more accurate idea of hours worked.

The long-term may be a bit trickier: Companies may have to change their culture to be less of an “always-on” culture. Encourage your team not to send routine or non-emergency communications in off-hours.

Or, if you really want to avoid having to pay overtime – and you would have to pay for hours beyond 40 in a workweek, whether workers were approved for the overtime or not – find out from HR and payroll what it would take in order to make sure your techs all fall above the $50,440 salary threshold if they meet the other computer professional exemption requirements.

Editor’s note: On Nov. 27, 2016, a federal judge in Texas issued an injunction blocking the overtime change. It’s unlikely the rule will be revisited in the next administration.