California's Overtime Laws Apply to Nonresident Employees


Employers who have employees temporarily working on assignments in California are now at risk if those employees are not paid in accordance with California overtime laws. In Sullivan v. Oracle Corporation, the California Supreme Court issued a unanimous decision on June 30, 2011, holding that California's overtime laws apply to work performed in California, even if it is brief and intermittent, by employees who are not residents of California and are based elsewhere.

The employer, Oracle Corp., was headquartered in California, and the Court's decision did not address the application of its ruling to companies headquartered elsewhere. However, it is likely that plaintiffs' attorneys will argue that the holding should apply to all companies — and courts may agree. This decision therefore raises significant potential liability exposure for employers who occasionally have non-California employees perform work in California regardless of where the employer is located.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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