The Fair Labor Standards Act (FLSA) sets minimum standards for hourly wages, overtime pay, and child labor. The FLSA requires employers to pay covered employees at least $7.25 an hour. The act also requires employers to pay covered workers at least one-and-a-half times their regular hourly wage for hours worked over 40 hours a week at a given job. The FLSA includes a number of exemptions that exclude certain employees from the minimum wage and overtime standards of the act. Exemptions apply to higher-paid professional and other employees, employees who may not work a fixed schedule from week to week, and employees whose work hours may be difficult for employers to monitor. In both 1990 and 1996, Congress amended the FLSA to exempt certain computer-related occupations from the minimum wage and overtime standards of the act. Under current law, computer systems analysts, programmers, software engineers, and similarly skilled computer employees are exempt from both the minimum wage and overtime requirements of the FLSA. Computer professionals are exempt if they meet a job duties test and are paid a salary of at least $455 a week or a wage of at least $27.63 an hour. Given recent interest in potential changes to the FLSA affecting workers in computer-related occupations, this report explains the exemption for computer employees and the regulations that implement the exemption. In addition, the report describes those computer occupations that are not exempt from either the minimum wage or overtime standards of the FLSA. In recent Congresses, legislation has been introduced that would expand the exemption for computer employees to include workers whose job duties include network or database analysis and workers who manage or train employees who qualify for the exemption. Accordingly, the final section of the report summarizes recent legislation to expand the exemption from the minimum wage and overtime for employees in computer-related occupations. Several reasons have been offered to justify a statutory minimum wage. One argument is that no worker should be paid less than a living wage. Another argument is that a fair wage should be paid to workers employed in jobs that require limited skills. A third argument for a minimum wage is that it can increase the purchasing power of low-wage workers and, therefore, raise aggregate demand for goods and services and reduce unemployment. In opposing a minimum wage, others argue that it diminishes the employment opportunities of less-skilled workers and does little to raise the incomes of low-income families—because many low-wage workers do not live in low-income families or because many low-income families do not have earners. Requiring employers to pay time-and-a-half for overtime has two policy objectives. First, time-and-a-half is intended to reduce involuntary unemployment. It is argued that paying more for overtime hours can shorten the workweek and increase overall employment. The second reason for overtime pay is to reduce overwork. During debate over the FLSA, proponents argued that some employees work overly long hours, which is harmful to individual health and public safety. Opponents of overtime pay argue that it does not increase employment and amounts to government interference in labor markets. When the Fair Labor Standards Act (P.L. 75-718) was enacted in 1938, Section 13(a)(1) provided an exemption, from both the minimum wage and overtime sections of the act, for bona fide executive, administrative, and professional employees (the EAP exemption). The act did not define the terms executive, administrative, or professional employee. Instead, the law stated that the terms would be defined in regulations issued by the administrator of the newly created Wage and Hour Division (WHD) of DOL. Under regulations issued by the administrator, executive, administrative, and professional employees were exempt if they met both a salary test and a job duties test. Employees in computer occupations may be exempt from the minimum wage and overtime standards of the FLSA under the EAP exemption. In addition, in 1990 Congress amended the FLSA to exempt certain employees in computer-related occupations. Regulations that implemented the 1990 amendments treated computer employees as professional employees. Professional employees include the traditional professions of law and medicine, but they also include engineers, accountants, nurses, social workers, and others. During hearings and debate before the FLSA was passed in 1938, very little was said about the reasons for the exemption for professional employees. The exemption had its roots in the National Industrial Relations Act of 1933 (NIRA, P.L. 73-67). In addition to funding public works projects, the NIRA allowed industries to establish "codes of fair competition." Many of these codes excluded professional employees from any minimum wage and overtime pay requirements. Despite limited congressional discussion of the reasons for the professional exemption, two explanations are often given. The most common justification for the exemption is that, compared to less-skilled workers, professional employees are better able to bargain individually over wages, hours, and working conditions. A second explanation is that professional employees may not work a fixed schedule. They may be called on to work evenings or weekends. In addition, if they travel it may be difficult for employers to monitor the total number of hours worked. The remainder of this report describes amendments to the FLSA and regulations that affect employees in computer-related occupations. After a review of these amendments, the report summarizes legislative proposals in recent Congresses that would expand the exemption for computer employees. With the development of computer technology and the growth of computer-related occupations, Congress amended the FLSA to exempt certain employees in computer-related occupations. In 1990, Congress directed the Secretary of Labor to include certain computer employees in the EAP exemption. The 1990 amendments ( P.L. 101-583 ) stated that the Secretary of Labor must issue regulations that would allow "computer systems analysts, computer programmers, software engineers, and other similarly skilled professional workers as defined in such regulations to qualify as exempt executive, administrative, or professional employees under Section 13(a)(1)" of the FLSA. P.L. 101-583 also directed Congress to apply the EAP exemption to employees in computer-related occupations if they were paid on an hourly basis at a rate of at least six-and-a-half times the basic federal minimum wage. At the time, the federal minimum wage was $4.25 an hour. Thus, hourly computer employees were exempt if they met the job duties test and were paid at least $27.63 an hour. Before the 1990 amendments to the FLSA, DOL regulations explained why certain employees in computer-related occupations were not exempt as "learned professionals." The regulations stated that learned professionals require "knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study." The regulations said that an academic degree, as opposed to just a high school education, was the best evidence of professional training. The regulations added that the areas where the professional exemption may apply were expanding. As knowledge is developed, academic degrees are offered in new fields and employees who are trained in these fields may be exempt as learned professionals. The regulations said that computer programmers and systems analysts were not learned professionals because there were no universally accepted academic requirements for employment in these occupations. At the time of the 1990 amendments to the FLSA, the EAP exemption applied to employees who met either a "long" or a "short" test. Under both tests, an employee had to be paid a salary and not an hourly wage. Salaried workers had to be paid their full salary for any week in which they worked, regardless of the number of days or hours they worked. Under the long test, an exempt professional employee had to be paid between $170 and $249.99 a week. The employee's primary duty had to consist of work that required advanced knowledge usually gained through a prolonged course of specialized instruction, that involved the consistent exercise of discretion and judgment, and that was mainly intellectual in character. Under the short test, exempt professional employees were paid at least $250 a week. Their primary duty included work that required the consistent exercise of discretion and judgment. (See the Appendix for the relevant parts of the long and short tests in effect before the 1990 amendments to the FLSA. ) In 1992, DOL published a final rule that implemented the 1990 amendments to the FLSA. The regulations treated computer employees as professional employees under the EAP exemption. The 1992 regulations stated that professional employees included highly skilled workers employed as computer systems analysts, computer programmers, and software engineers, or in other skilled computer occupations. Regulations added language to exempt hourly employees who were paid at least $27.63 an hour. The weekly salary test for computer professionals remained the same as under prior regulations: between $170 and $249.99 under the long test and at least $250 under the short test. Finally, the regulations added language that detailed the primary duties of computer professionals. The 1992 regulations added language to existing Code of Federal Regulations (C.F.R.) Section 541.3 and added new language to renumbered Section 541.303. Specifically, new Section 541.3(a)(4) stated that professional occupations include Work that requires theoretical and practical application of highly-specialized knowledge in computer systems analysis, programming, and software engineering, and who is employed and engaged in these activities as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer software field, as provided in Section 541.303. New language covering hourly employees was added to existing Section 541.3(e). Revised Section 541.3(e) stated: That the salary or fee requirements of this paragraph shall not apply to an employee engaged in computer-related work within the scope of paragraph (a)(4) of this section and who is compensated on an hourly basis at a rate in excess of 6 times the minimum wage provided by Section 6 of the Act. Finally, the 1992 regulations included language that described the primary duties of computer professionals.