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California Supreme Court Requires Overtime Pay for Certain Out-of-State Workers

    Client Alerts
  • July 15, 2011

California's wage and hour laws are substantially stricter compared with those of most other states or under the federal Fair Labor Standards Act. Last week, the California Supreme Court extended the jurisdiction of those laws to employees who are residents of other states, but spend time working in California for a California-based employer.

In Sullivan v. Oracle Corp., Oracle is a California-based employer that had trainers based in Arizona occasionally travel to California for work. The California court concluded that the Arizona residents are nevertheless subject to California overtime laws for the time spent working in that state.

The California Supreme Court specifically stated that its ruling does not apply to businesses based outside of California that might occasionally send workers to California for business purposes. However, the court's failure to close the door to wage claims from such employees makes it likely that this will be the next litigated issue. Should California courts extend their wage and hour laws to such occasional business trips, employers sending workers to California will need to exercise caution with regard to that state's unique interpretations of exemption and working time issues possibly applicable to such visits.