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California Employment Laws and Out-of-State Employees
California overtime laws do apply to out-of-state residents who work for California-based companies and only work in the state part of the year.
December 25, 2011 /Mens Interest PR News/ -- Federal law sets minimum standards for minimum wage, overtime pay, record keeping and youth employment. The Fair Labor Standards Act has been a key part of American life since the 1930s, and it remains one of the basic building blocks of our society.
Because the FLSA is only a minimum standard, states are free to set more stringent laws for employers who operate within their boundaries. California, for example, has a reputation for being an employee-friendly state, enacting employment laws that go above and beyond the FLSA.
In a case called Sullivan v. Oracle Corporation, the California Supreme Court addressed the issue of how California overtime laws apply to out-of-state residents who work for California-based companies and only work in the state part of the year. It is important for employers and employees to understand how California laws apply to out-of-state workers and the questions that still remain in this area after the Sullivan decision.
California Overtime Law
California's overtime laws mandate that employers pay non-exempt employees overtime for the time over eight hours per day that the employees work. In most states, employers only have to pay employees overtime if the employees work more than 40 hours in a week.
In the Sullivan case, the plaintiffs were instructors who worked for Oracle Corporation, a California-based company. The plaintiffs lived in Arizona and Colorado and worked in California over a three-year period. Oracle initially classified the employees as exempt for those three years, but then changed them to non-exempt for the purposes of overtime pay. The plaintiffs argued that they were entitled to overtime under California's employment laws for the time they were working in California and misclassified as exempt.
The California Supreme Court agreed with the plaintiffs that Oracle Corporation needed to pay them overtime based on California laws for the time the employees were in California. The court reasoned that the state had a strong interest in ensuring that employers did not circumvent overtime laws by simply bringing in out-of-state workers and overworking those employees.
However, the court affirmed a lower court's holding that Oracle did not need to pay its employees nationwide based on California's employment laws when the employees were not in California.
Confusion Remains
Many employers are confused about what the Sullivan decision means for how they pay employees. The court said that the decision applies to "California employers" but did not define what that means. Many wonder if it applies only to companies incorporated or based in California, or if it simply means any company who employs a California resident.
The court also did not address whether California's other wage and hour laws would apply to out-of-state employees working in California, such as laws governing vacation time and pay stubs.
Employment laws exist to protect the rights of employees because employers often have more power in the employment relationship. Employers often resist giving employees the full protection that the law allows them. If you believe your rights have been violated by your employer, contact an experienced attorney who can discuss your situation with you and advise you of your options.
Article provided by Marlin & Saltzman LLP
Visit us at www.marlinandsaltzman.com
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