Non-California Employers May be Subject to California’s Labor Code

Are you a business based outside California that sends employees to perform short-term assignments in California?  If so, according to the Ninth Circuit Court of Appeals, those workers are covered by California’s Labor Code for work performed in that state, regardless of the length of the work assignment.  For non-exempt (i.e., hourly employees) that means they are entitled to overtime after working 8 hours in a day as well as after 40 hours in a week (and are entitled to double time when they work more than 12 hours in a day).  Also, California uses a more exacting standard than federal law in determining whether a worker qualifies as exempt from the overtime requirement. Additionally, California mandates certain meal and rest breaks for non-exempt employees.  Finally, California prohibits “tip credits” and the “fluctuating workweek” method of calculating overtime pay.

This decision is a trap for the unwary.  Please be mindful of your company’s additional obligations should you send employees to perform work in California.