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Your Legal Corner - Client Alert Blog

Out Of State Employees Stationed in CA, even for a day or week, are Entitled to CA Overtime Pay

Written By: Melissa C. Marsh, Esq., California Attorney, July 2011 Add to Favorites
On June 30, 2011, the California Supreme Court unanimously held in Sullivan v. Oracle (S170577) that: (1) California's overtime laws do in fact apply to nonresident employees who work in California, even temporarily; (2) that failure to pay overtime wages to nonresidents employed in California can form a basis of an a Business and Professions Code Section 17200 claim commonly referred to as an UCL claim ( act or practice) thus extending the statute of limitations for such claims from 3 to 4 years; but that (3) overtime claims under the Fair Labor Standards Act for overtime work performed by nonresidents in another state who are also paid in another state cannot form the basis of a California UCL claim.

In Sullivan, the plaintiffs were residents of the states of Colorado and Arizona who worked for Oracle (a California based company) primarily in their home states but were occasionally assigned to perform temporary work in the state of California. The Plaintiffs who were classified by Oracle as exempt from overtime, sued Oracle claiming they were entitled to overtime pay for the work they performed in California. Oracle claimed it was not required to pay California overtime because the laws of Colorado and Arizona followed the employees during the temporary work periods in California.

In Sullivan, the California Supreme Court reaffirmed its decision in Tidewater Marine Western, Inc. v. Bradshaw, 14 Cal.4th 557 (1996), stating:

"California law might not apply to nonresident employees of out-of-state businesses who ‘enter California temporarily during the course of the workday’ (ibid., italics added). In contrast, plaintiffs here claim overtime only for entire days and weeks worked in California, in accordance with the statutory definition of overtime. (See Lab. Code, § 510.) Nothing in Tidewater suggests a nonresident employee, especially a nonresident employee of a California employer such as Oracle, can enter the state for entire days or weeks without the protection of California law."
According to the Court, "California's overtime laws apply by their terms to all employment in the state, without reference to the employee's place of residence." Consequently, employers who intend to have out-of-state residents perform temporary work in the State of California (even for a day) should set up a system to track the daily and weekly overtime hours of employees temporarily stationed in California. Such employers should also be mindful that what constitutes a nonexempt employee in their home state may not qualify as an exempt from overtime employee in California.

Tags: overtime pay, out of state resident employees
Posted In: Employment Law News 

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Located in Los Angeles, California, the Law Office of Melissa C. Marsh handles business law and corporation law matters as a lawyer for clients throughout Los Angeles including Burbank, Sherman Oaks, Studio City, Valley Village, North Hollywood, Woodland Hills, Hollywood, West LA as well as Riverside County, San Fernando, Ventura County, and Santa Clarita. Attorney Melissa C. Marsh has considerable experience handling business matters both nationally and internationally. We routinely assist our clients with incorporation, forming a California corporation, forming a California llc, partnership, annual minutes, shareholder meetings, director meetings, getting a taxpayer ID number (EIN), buying a business, selling a business, commercial lease review, employee disputes, independent contractors, construction, and personal matters such as preparing a will, living trust, power of attorney, health care directive, and more.