California Supreme Court Rules in Oracle Overtime Lawsuit
July 19, 2011
According to a recent California Supreme Court wage and hour ruling that our Newport Beach employment attorneys have been closely following, California companies must follow state law on overtime payment for out-of-state residents who are working in California.
The California class action wage and hour lawsuit was originally filed against Oracle Corporation, by a group of instructors, residents of Arizona and Colorado, who traveled between states, instructing customers on how to properly use the Oracle software products. The employees argued in the lawsuit that under California's wage and hour laws, they should be entitled to overtime payment for working over eight hours in a day, during California business trips.
The employees in the lawsuit claimed that Oracle engaged in employee misclassification by erroneously classifying them as teachers under federal law, putting them in the category of "exempt" workers, who are not entitled to overtime compensation. The employees argued that they were in fact "non-exempt" employees under California law, and should be eligible to receive overtime payment.
Oracle reportedly argued that California law should not apply to employees visiting from other states, as their own state laws should follow them while working in any other states. Oracle also claimed that applying California's wage and hour laws to employees who are visiting and not residents would impose undue burdens on California employers. Oracle's other argument claimed that both Colorado and Arizona's wage and hour laws conflicted with California's, and therefore Oracle couldn't properly apply the California laws.
The California Supreme Court decided unanimously that non-exempt employees who are residents of Arizona or Colorado, and who work for a California-based company spending entire days or weeks working in the state of California, should be covered by California's overtime laws while working in California. The state's highest court did not find any conflicts in the laws of all three states and ruled in favor of the employees.
Experts reportedly told the Los Angeles Times that the California Supreme Court Decision could reduce business travel to California, and could lead to a large number of lawsuits against California companies. But labor groups stated that this decision will protect California workers, by keeping employers from replacing California labor with out of state workers, in order to cut costs and avoid overtime laws.
In Tustin, Villa Park, and Stanton, California, contact our attorneys at Howard Law, PC today for a free consultation about your California labor and employment rights.
California Supreme Court rules in overtime case, Los Angeles Times, June 30, 2011
Oracle Overtime Case Spells Trouble for California Tech Companies, CIO, July 11, 2011
Calif overtime laws protect nonresident employees, San Francisco Gate, July 1, 2011
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