Sullivan v. Oracle Corp.: Court Requires California Employers to Pay California Wages to Employees Residing in Another State

This case addressed the applicability of California wage and hour law to nonresident employees who work in California. The court ruled California law governs their pay, even if the state they reside in also governs their pay. “California’s overtime laws apply by their terms to all employment in the state, without reference to the employee’s place of residence. http://www.courtinfo.ca.gov/opinions/documents/S170577.PDF

The court reminded employers: “The Legislature has… exempted certain out-of-state employers who temporarily send employees into California from the obligation to comply with the workers‟ compensation law (Lab. Code, § 3200 et seq.), on the conditions of compliance with the home state’s compensation laws and interstate reciprocity (see id., § 3600.5, subd. (b)). In contrast, the Legislature has not chosen to authorize an exemption from the overtime law on the basis of an employee’s residence, even though it has authorized exemptions on a variety of other bases.”

Further: “California law…might follow California resident employees of California employers who leave the state “temporarily . . . during the course of the normal workday” (id., at p. 578), and 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 … 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.”

Note: the court did not have to decide the case on the fact of an out of state employer as Oracle is CA based.