Ca. Overtime Laws Apply to Nonresident Workers

If you think your business is exempt from California overtime laws, think again.

Under the California Supreme Court's newly released decision in Sullivan v. Oracle, all non-exempt employees are subject to California's wage and hour laws for any work that is conducted within the state's borders.

This is regardless of whether an employee is a California resident, or your company is based within the state.

The court's decision is premised on a situation in which a group of out-of-state employees, whose job required them to come into California to teach customers to use Oracle software, were denied overtime under California law.

California regulates both hours (8) per day and (40) per week, which is much stricter than most other states.

Oracle argued that because the employees lived in and were based out of Arizona and Colorado, California's strict overtime laws do not apply, even to work done within the state.

Drawing on the intent of overtime laws--to protect the health and safety of workers--the court sided with the employees.

The implications of this decision are threefold.

First, if you are a California company, you cannot bring in temporary non-resident workers, even if from another office, and deny them overtime under state law.

Second, there is a strong likelihood that California overtime laws do not apply when a California company sends a California worker to another state. However, that state's laws likely apply.

And third, non-California companies may also be liable under California overtime laws when any of their employees perform job-related duties within the state.

Related Resources:

• Top court rules on nonresidents' overtime in state (San Francisco Chronicle)
• Federal Wage Law: The Fair Labor Standards Act (FindLaw)
• Top 5 FLSA & Overtime Rules for Employers (FindLaw's Free Enterprise)