The California Supreme Court recently ruled, unanimously, that residents of other states who work for California companies are protected by California's overtime laws during business trips to California. This result will most likely result in an increase in employment lawsuits against California companies because companies pay employees pursuant to the laws of the state of the employee's residence. One of the reasons for ruling as it did, according to the California Supreme Court, was to protect California workers from being replaced by less-expensive temporary employees from other states. The court further believes that its ruling was necessary to protect to California's legitimate interest in expanding the job market.
The case involved employees of Oracle Corporation, a California corporation, from Arizona and Colorado who sued to obtain the benefits of California's overtime laws while they were on business trips to California. According to California's overtime laws, non-exempt employees who work more than eight hours a day or forty hours a week get paid one and a half times their normal pay. For any California employees who work more than eight hours a day for seven days, the employee gets paid twice their normal rate. Arizona apparently has no such overtime laws and Colorado's law does not extend beyond Colorado's border.
If you are a California employer, you should review your payroll and employee tracking systems to ensure that any visiting employee receives payment pursuant to California law. This could end up costing your company much more. The other obvious result will be to encourage California employers to let California-based employees to do the work in California.
Now, the question becomes whether any other California labor laws extend to out of state employees? Most likely it will only be the minimum-wage law and could possibly include health and safety laws. Also, what happens if the employer uses online collaboration software, instead of having the out of state employee travel to California, to do what he or she would have done in California? Would that mean the employee who is "virtually" in the state may receive the benefits of California's labor laws? It seems as if the employee who appears "virtually" would not get the benefits of California's labor laws, but only time (and litigation) will tell.
Now, the question becomes whether any other California labor laws extend to out of state employees? Most likely it will only be the minimum-wage law and could possibly include health and safety laws. Also, what happens if the employer uses online collaboration software, instead of having the out of state employee travel to California, to do what he or she would have done in California? Would that mean the employee who is "virtually" in the state may receive the benefits of California's labor laws? It seems as if the employee who appears "virtually" would not get the benefits of California's labor laws, but only time (and litigation) will tell.
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