2027 Computer Professionals, Licensed Physician/Surgeon Overtime Exemption Rates

The California Department of Industrial Relations (DIR) has released the 2027 rate increases for the computer software employee and the licensed physician and surgeon exemptions. These new rates take effect on January 1, 2027.

Each year, the DIR adjusts these rates by an amount equal to the percentage increase in the California Consumer Price Index (CCPI) for Urban Wage Earners and Clerical Workers. The 2027 rate changes reflect the 3.7 percent increase in the CCPI.

To be considered an exempt computer professional, a computer software employee must meet certain requirements, such as being highly skilled and proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming and software engineering. However, even computer professionals who don’t meet those requirements could still qualify as exempt under one of the other exemptions, such as the administrative or professional exemption. For the computer software employees’ exemption:

• The minimum hourly rate of pay exemption increased to $61.03 from its previous rate of $58.85;
• The minimum monthly salary increased to $10,592.37 from its previous rate of $10,214.44; and
• The minimum annual salary increased to $127,108.34 from its previous rate of $122,573.13.

A licensed physician or surgeon primarily engaged in performing duties for which licensure is required is exempt from overtime if they’re paid at least the minimum hourly rate set annually by the state. For the licensed physician and surgeon exemption:

• The minimum hourly pay for licensed physicians and surgeons increased to $111.14 from $107.17.

Remember that California’s minimum wage will also increase on January 1, 2027, to $17.40 per hour — which will affect the commonly used professional, executive and administrative exemptions. Keep in mind that individuals in these classifications must be paid at least two times the state minimum wage, in addition to meeting all other legal requirements for these exemptions. Beginning January 1, 2027, the minimum salary for a full-time exempt employee will be $72,384 per year ($6,032 per month).

CalChamber members can read more on the Computer Professional Exemption and the “Exemption for Physicians Paid on an Hourly Basis” on the Professional Exemption pages in the HR Library. Not a CalChamber member? See how CalChamber can help you.