New 2019 Exempt Classification Rates

Once again, the California Department of Industrial Relations (DIR) announced rate changes for the computer software employee exemption and the licensed physician and surgeon exemption.

These new rates take effect January 1, 2019.

For the computer software employees’ exemption:

  • The minimum hourly rate of pay exemption increased to $45.41 from its previous rate of $43.58;
  • The minimum monthly salary increased to $7,883.62 from its previous rate of $7,565.85; and
  • The minimum annual salary exemption increased to $94,603.25 from its previous rate of $90,790.07.

For the licensed physician and surgeon exemption, the minimum hourly pay for licensed physicians and surgeons increased to $82.72 from $79.39.

These rates are tied to the California Consumer Price Index (CCPI) for Urban Wage Earners and Clerical Workers. The 2019 rate changes reflect the 4.2 percent increase in the CCPI.

Remember that California’s minimum wage will also increase on January 1, 2019 — this increase will affect the commonly used professional, executive and administrative exemptions. Individuals in these classifications must be paid at least two times the state minimum wage, in addition to meeting all other legal requirements for this exemption.

Download CalChamber’s free white paper 2019 Minimum Wage Hike Brings Changes for California Employers to learn more. Members can access the free minimum wage white paper in the HR Library.

CalChamber members can get more information from the HR Library’s Computer Professional Exemption and the “Exemption for Physicians Paid on an Hourly Basis” on the Professional Exemption pages on HRCalifornia. Not a CalChamber member? See how CalChamber can help you.

The California Chamber of Commerce is the largest, broad-based business advocate to government in California, working at the state and federal levels to influence government actions affecting all California business. As a not-for-profit, we leverage our front-line knowledge of laws and regulations to provide affordable and easy-to-use compliance products and services.