Computer Employee Exemption

Computer Employee Exemption

The Law Offices of Kevin J. Dolley represents a variety of clients in connection with claims, questions, or concerns about the applicability of FLSA exemptions in computer-related fields, such as information technology (IT). Computer-related occupations invite a host of issues and questions regarding the nature and scope of the “computer employee” exemption under the FLSA. This is often because tasks performed and terminology used in the industry can be twisted or stretched to appear to constitute “exempt” work as defined by the FLSA. Having knowledgeable and experienced counsel in this area of law is critical to develop an understanding of who the “computer employee” exemption applies to, how, and why.

Who is a “computer employee”?

The FLSA does not specifically define the phrase “computer employee” but it contains a description of the types of computer-related occupations or work that are exempt. Section 213(a)(17) states the following employees are exempt: “any employee who is a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker, whose primary duty is:

  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 duties described in subparagraphs (A), (B), and (C) the performance of which requires the same level of skills; and

who, in the case of an employee who is compensated on an hourly basis, is compensated at a rate of not less than $27.63 an hour.” 29 U.S.C. § 213(a)(17).

The DOL has emphasized a few important principles related to the computer employee exemption. Job titles do not determine exempt status. See 29 C.F.R. § 541.400(a) (“[b]ecause job titles vary widely and change quickly in the computer industry, job titles are not determinative of the applicability of this exemption”). The exemption does not include employees engaged in the manufacture or repair of computer hardware and related equipment. See 29 C.F.R. § 541.401. Employees whose work is highly dependent upon, or facilitated by, the use of computers and computer software programs (e.g., engineers, drafts, and others skilled in computer-aided design software), but who are not primarily engaged in computer systems analysis and programming or other similarly skilled computer-related occupations are not exempt. Id.

What is computer systems analysis and programming?

Courts across the country have interpreted these terms and the computer employee exemption in varying ways. At least one Circuit Court of Appeals—the Sixth Circuit—has carefully explained the “understandable mistake” commonly made by courts about the nature and scope of this exemption. In Martin v. Indiana Michigan Power Co., the Sixth Circuit reversed the trial court’s grant of summary judgment in favor of the employer because it mistakenly assumed that “highly specialized knowledge of computers and software” sufficed to meet the requirements of the computer employee exemption. 381 F.3d 574, 579-80 (6th Cir. 2004). The Court aptly explained on appeal:

“The district court made an understandable mistake, one that arises from the common perception that all jobs involving computers are necessarily highly complex and require exceptional expertise. However, the regulations provide that an employee’s primary duty must require ‘theoretical and practical application of highly specialized knowledge in computer systems analysis, programming, and software engineering” not merely “highly specialized knowledge of computers and software.” This is an important difference. The former is a narrower class of jobs that requires a different level of knowledge and training than the latter. Further, it is a distinction which will only become more relevant as the range of computer-related jobs continues to broaden.”

Id. at 580. True to this distinction, the Sixth Circuit turned to the employee’s duties as contained in the record, and explained how they fail to meet the requirements of the computer employee exemption:

“Martin does not do computer programming or software engineering; nor does he perform systems analysis, which involves making actual, analytical decisions about how Cook’s computer network should function. Rather, Martin’s tasks—installing and upgrading hardware and software on workstations, configuring desktops, checking cables, replacing parts, and troubleshooting Windows problems—are all performed to predetermined specifications in the system design created by others. As Martin testified, he is provided the standard ‘desktop’ for installation on the computers he configures, but he is not involved in determining what the desktop should look like. Thornburg explained, as we noted above, that IT Support is a ‘maintenance organization that takes care of computer systems.’”

Id. The Sixth Circuit then addressed, and rejected, the employer’s attempt to selectively pick words from the computer employee exemption (e.g., “consulting with users,” “testing,” etc.) and apply them out of context. Id. at 580-81. The Court noted, “Martin ‘consults with users’ for purposes of repair and user support, not to determine what ‘hardware, software, or system functional specifications’ the Cook facility will employ, as a systems analyst might.” Id. The Court continued, “[l]ikewise, when Martin does ‘testing,’ he is testing things to figure out what is wrong with a workstation, printer, or piece of cable so that he can restore it to working order. He is not doing the type of testing that is involved in creating a system, determining the desired settings for a system, or otherwise substantively affecting the system.” Id. The Court concluded, “[m]aintaining the computer system within the predetermined parameters does not require ‘theoretical and practical application of highly specialized knowledge in computer systems analysis, programming, and software engineering.” Id.

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If you have questions or concerns regarding the nature and scope of the computer employee exemption under the FLSA, contact the Law Offices of Kevin J. Dolley by phone at (314) 645-4100 or by email at kevin@dolleylaw.com.

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