San Diego employment attorney Ward Heinrichs explains how multi-state employment laws impact wages, overtime, and compliance for businesses operating across borders. Check out his podcast episode above, and article below.
CALIFORNIA EMPLOYMENT LAW CAN APPLY TO OUT-OF-STATE EMPLOYERS & EMPLOYEES
By S. Ward Heinrichs Esq.
In most cases, the employment law of the state in which an employee works applies to that employee. When you think about it, that makes sense. When you wake up, put your clothes on, and drive to your workplace, you would expect the law of the state in which you do those things to apply.
What if all those things do not happen in one state? Some employees live in one state but travel to other states to perform work for an employer. In those situations, when does California law apply?
The California Supreme Court (CSC) has clearly stated that when an out-of-state employee works in California, the employer must pay overtime in accordance with California law. (Sullivan v. Oracle Corporation, 51 Cal. 4th 1191 (2011).) Additionally, the CSC has addressed a few other situations in which California wage & hour laws will apply to workers who do not always work in California. Still, arguably, even more wage & hour laws should apply given the Court’s ruling in Sullivan. (Bernstein v. Virgin America, Inc., 999 F.3d 1188 (9th Cir. 2021).)
What happens when an out-of-state employee travels through many states and performs some work in California? Picture a flight attendant based in Nevada who flies into and out of other states, including California. The CSC has stated that when an employee works more than 50% of their time during any given pay period in California, their pay stubs must comply with California law. (Ward v. United Airlines, 9 Cal. 5th 732 (2020).) Furthermore, California laws governing the timing of wage payments and the length of pay periods will also apply. (Oman v. Delta Airlines, Inc., 9 Cal. 5th 762 (2020).)
What if that out-of-state employee, who works in several states, spends more than fifty percent of his or her time in another state? According to the California Supreme Court, the paystub and payment timing laws of that other state will apply.
What if that same employee does not work at least fifty percent of the employee’s time in any one state? Then the law of the state in which the employee starts a workday applies.
Based on the above CSC holdings, arguably, other California wage & hour laws will also probably apply given the right circumstances. (Bernstein.) However, certainly, other out-of-state worker situations still do not have clear answers.
For instance, what happens if an employee always starts each workday by working 2 hours in Nevada, spends the next 5 hours in California, but finishes a final 2 hours in Oregon? Certainly, the California paystub law should apply; will the California overtime law apply too?
Let’s change the facts and say that the employee works the first 5 hours in Nevada but works the next 4 hours in California. The Nevada paystub and wage payment timing laws would appear to apply, but again, what about the California overtime law? After all, the last hour of a nine-hour day was worked in California, and under California law, any time worked beyond 8 hours in a day gets overtime premium pay.
Most situations are not as complicated as the last two, but, in this tricky legal space, it makes sense to speak to a California employment law attorney when a question arises about whether California law should apply to a traveling employee.
Based in San Diego, California the Employment Law Office of Ward Heinrichs represents both employers and employees in almost all areas of labor law. He and his firm litigate cases that have been filed in many different parts of California. Keep up with him at https://bestemploymentattorneysandiego.com/
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