Court sides with nonresidents on overtime

By CMTA Staff

Capitol Update, July 8, 2011

Last week, the California Supreme Court ruled that out-of-state employees who work for California based companies are subject to California overtime laws during business trips to the State.  The decision is a result of a class action lawsuit brought against a California company by employees living outside of California.

According to the Court’s decision, California overtime law language does not imply that provisions apply only to California residents.  The Court decision stated “not to apply California law would also encourage employers to substitute lower-paid temporary employees from other states for California employees, thus threatening California’s legitimate interest in expanding the job market.

Employment lawyers are already predicting that the ruling would reduce business travel to California and trigger hundreds of lawsuits in the coming days. Firms now typically pay employees in accordance with the labor laws of the states in which they live.

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