(obligatory disclaimer: I am not an employment lawyer, nor a lawyer of any sort.)
For my first software engineering job out of grad school, I was offered a salary of $80,000 a year. Said job was full-time, non-hourly, and located in San Francisco. I negotiated, because negotiation is Something You're Supposed to Do, and got a bump up to $82K. Not bad, for 20 minutes of extremely uncomfortable phone conversation and feeling a bit like a bitch!
Today I learned that that the salary I was originally offered was illegally low. My negotiation just pushed it back into the legal range. And when 2013 rolled around, even that amount was below the minimum salary for exempt (meaning non-overtime-paying) computer programming jobs under California law. I wasn't (just?) paid less relative to other tech workers in the frothy, dysfunctional Bay Area tech sector– I was legally underpaid!
This job wasn't at a tiny three-person startup without a clue, either. This was a 40+ person company, with actual in-house HR. A generous interpretation is that a lot of tech companies out there are unaware of this law--certainly most individual employees are! A few might be banking on that ignorance, though. Protect yourself.
What the law says
(Again, I am totally not a lawyer. This is just what you get once you learn to google "Computer Software Occupations Exemption".)
By default, jobs in California entail an hourly wage with time-and-a-half overtime, lunch breaks, and other requirements. Under California law, there are a few classes of job that are exempt from these requirements (hence why on more old-school job sites and payroll tools you see the term Exempt)--for example, taxi drivers and farmers. Among white-collar jobs, "Executive", "Administrative", and "Professional" positions are also exempt, subject to a number of requirements, including a minimum salary corresponding to double the local minimum wage times 40 hours a week. These three exceptions do not apply to most tech workers.
Unlike federal law, and most other states to the best of my knowledge, California has an additional class of exempt job: one for "Computer Software Occupations". For these positions, the minimum salary is higher. It also gets adjusted each fall by the Division of Labor Statistics and Research to keep up with cost of living. What that amounts to in terms of full-time minimum salary for a given year:
Minimum Computer Software Occupation Salary
"Computer Software Occupations" is defined as:
California Labor Code §515.5
(a) Except as provided in subdivision (b), an employee in the computer software field shall be exempt from the requirement that an overtime rate of compensation be paid pursuant to Section 510 if all of the following apply:
(1) The employee is primarily engaged in work that is intellectual or creative and that requires the exercise of discretion and independent judgment, and the employee is primarily engaged in duties that consist of one or more of the following:
(A) The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications.
(B) 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.
(C) The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.
Employees who are still learning (e.g. interns, others unable to work independently without close supervision), IT workers, people who mainly work on hardware instead of software, copywriters, and special effects artists and similar movie industry employees are exceptions to the above. (Check the full snippet of the law.)
If you think your job fits this category, you make less than $84,130.53 working full-time, and you work in California: now would be a nice time to talk to your employer's HR department and/or consult with an actual lawyer.
If you're an employer and think this law is weird and overpays some roles: sure, whatever, but this is the freaking law. Your options are: get out of California, make your less-well-paid tech employees non-exempt (with overtime and the myriad other headaches that entails), or bump people's salaries up. Don't be a jerk.