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This article is reprinted with permission from the May 2006 edition of TEQ Magazine.

Recently, there has been a spate of class action cases brought by attorneys who seek to recover unpaid overtime on behalf of current and former employees who were misclassified as exempt from overtime pay under Federal and/or State law. Indeed, such class action cases are currently the lawsuit du jour of the plaintiff’s bar because even small amounts of overtime not accounted for, when calculated over the statutory period, can result in significant liability. Further, the employer is on the hook for the payment of all of the plaintiff’s attorneys’ fees, which can be substantial.

Employers often operate under the impression that if they comply with overtime pay requirements under Federal law, they are automatically in compliance with Pennsylvania’s overtime laws as well. Such an impression is, however, wrong when it comes to deciding whether the computer professional who works for you is entitled to overtime. Federal law and Pennsylvania law differ as to whether a computer specialist is entitled to overtime pay (at time and one-half for hours over 40 worked in a work-week) and it is important for employers who operate in Pennsylvania to understand the differences.

Federal Law

Under the U.S. Department of Labor’s recently revised overtime regulations, Federal law, commonly referred to as the Fair Labor Standards Act (FLSA), provides an exemption from both minimum wage and overtime pay for persons working as computer systems analysts, computer programmers, software engineers, and other similarly skilled workers in the computer field who are paid at least $455 per week on a salary basis, or paid no less than $27.63 per hour, and whose job duties must include one of the following:

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 previously mentioned job functions, the performance of which requires the same level of skills.

Please recognize that the mere fact that an employee can fix a simple computer problem, install software or perform other basic computerrelated duties, would not necessarily qualify him/her for this exemption. The regulations appear to require more advanced skills that are typically found at the computer help desk.

Any employer who fails to meet either the salary/hourly wage requirements or the duties requirements set forth above, would be in violation of the FLSA and subject to payment of any unpaid overtime for up to a period of three years, plus other damages, as well as the employee’s attorneys’ fees.

State Law

Unlike Federal law, Pennsylvania State law does not relieve the employer from providing overtime pay to computer professionals based upon the duties tests adopted by the Federal government (and listed above). Instead, Pennsylvania operates under its well-established regulations that in order for a computer professional to be exempt from overtime requirements, he/she must meet the requirement for one of the exemptions allowed by Pennsylvania law found at (34 Pa. Code §§ 231.81 - 231.85).

Typically, the exempt computer professional in Pennsylvania falls within one of the following classifications:

1) Executive — whose primary duty is the management of the enterprise and is paid a salary of at least a $255.00/week salary; or

2) Administrative — whose work is directly related to the management of general business operations of the employer and is paid at least a $255.00/week salary; or

3) Learned Professional — whose primary duty must be the performance of work requiring advanced knowledge and which involves consistent exercise of discretion and judgment, administrative or professional employee, as each of those terms are defined under state law, and who is paid at least a $255.00/week salary.

Be advised, however, that many computer related jobs that exist in Pennsylvania will not be considered exempt from overtime, as they usually do not fall within Pennsylvania’s interpretation of the above stated exemptions, or because the positions do not pay on a salary basis.

Employers in Pennsylvania (as well as other states such as California, New Jersey and New York, to name a few) must comply with both state and federal overtime regulations. Where Pennsylvania and federal law differ regarding overtime regulations, an employer must follow the regulation that is most favorable to the employee. This is true even when Pennsylvania law is more burdensome for an employer than are the federal requirements.