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Calif. OT law may apply to out-of-state workers

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Do you have employees who live and work in another state, but whose jobs sometimes bring them to California? Then you may be making a big overtime mistake if you pay them as if they were working in their home states.

California has some of the most generous overtime rules in the country. Most states and the federal government require overtime only for hours in excess of 40 in a one-week period. But California requires overtime for any hours worked over eight hours in one day. Plus, employees get double pay for hours worked beyond 12 in a day, or eight hours on the seventh day of any one workweek.

Make sure you apply California’s strict rules when figuring out how much to pay out-of-state employees who come into California to work a day or more.

Recent case:
Oracle employed several software instructors who lived in Arizona and Colorado and reported to Oracle offices in those states according to the rules in their home offices—even when they came into California to work. They sued, alleging overtime violations.

Oracle argued it didn’t have to follow the California rules, but the 9th Circuit Court of Appeals disagreed. It said California’s strict overtime rules applied to the Oracle employees, especially since Oracle had offices in California and appeared to have made the decision on how to pay the out-of-state employees in those offices. (Sullivan, et al., v. Oracle, No. 06-56649, 9th Cir., 2008)

Final note:
If you have offices in states other than California, make sure you get expert advice on how to pay employees from those other states when they are working temporarily in California.

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