CA Supreme Court Finds Some of California's Employment Laws Reach Out of State Employers
COVID 19 has the world evolving, and rather quickly. Employers are looking to change business models, including where their employees work. Clients are always asking, or more so telling, me that they want to move out of state to avoid California's onerous employment laws. But employer beware, California law can be farther reaching than you may think.
Before moving your operations partly or wholly out of state, you may want to consult and employment attorney to best structure that set up. There is never a shortage of legal traps and you don't want your "change for the better" doesn't become change for the worse.
Early this summer the California Supreme Court issued dual decisions that determine some of California's employment laws reach out of state employers, even with employees who don't work completely in California. The two cases are:
The decisions are pretty long and cover a lot of overlapping ground, so this post will be the bite size cliff notes of what the Court decided. In short there are three main items employers need to consider for employees who do not work completely in California
Employees who are otherwise exempt under the collective bargaining exemption found in the IWC Wage Order No. 9, are still entitled to the protections under the wage statement requirements of Labor Code § 226.
Employers in the interstate transportation business need to evaluate the wage statement requirements under Labor Code § 226 and the timing of payments (at least semi-monthly) under Labor Code § 204. The Court outlined a test that looks at the employee's "principal place of work" to determine if employees are permitted the protections of these California employment laws.
Lastly, employers who have pay compensations schemes involving multiple formulas need to cautiously structure these schemes to not violate the "wage borrowing" or sometimes referred to as "wage averaging" rules. Employers want to be cautious that they are paying at least minimum wage. California and localities in California usually have higher minimum wages.
if you are dealing with interstate business and have employees working in California at least part of the time you will want to be cautious in how you are handling their wages. Should you have any questions feel free to reach out to me- firstname.lastname@example.org | 818. 306. 0686
The information in this post is for general information purposes only. Nothing on this post should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.