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California Supreme Court rules in overtime case [Updated]

June 30, 2011 |  1:58 pm

The California Supreme Court decided unanimously Thursday that out of state residents who work for California-based companies are protected by the state's overtime laws during business trips here.

Employment lawyers predicted the decision would trigger hundreds of new  lawsuits in the coming days against California companies for alleged violations of all sorts of state labor laws. Companies now typically pay employees in accordance with the labor laws in the states in which they live.

The class action lawsuit was brought by instructors for California-based Oracle Corporation who live and primarily work outside the state. The workers contended they were entitled to benefit from a state law that requires overtime pay for working more than eight hours in a single day during business trips to California that lasted a few days.

The court's ruling was aimed at overtime laws, and the court said it was not addressing whether other sorts of labor laws might also apply to workers on business trips.

Travel companies warned the decision could lead to a loss of convention business in California, but labor groups said it would help ensure that California companies do not bring in workers from other states just to avoid overtime laws.

[Updated, 2:20 p.m., June 30: The ruling may discourage business travel to California and force employers to revamp payroll systems to track more carefully where employees are working, said Robert S. Span, a lawyer who represented the airline, hotel and restaurant industries in the case.

"Previously most employers in California believed that a non-California resident was not subject to  California employment laws, even if that person came into the state for a brief period of time," Span said.  "And if you extend California law in the overtime area, will you also be extending other California labor laws to employees who live out of state?"

Charles S. Russell, who represented the workers in the case, said the ruling probably would extend only to  minimum-wage law and other requirements considered to be matters of health and safety.

Russell likened the effect to laws that require motorists to abide by different speed laws in different states.

"When you are in a state, you are going to have to comply with the laws of the state you are in," he said.]


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-- Maura Dolan