What overtime rules apply to employees who are not residents of the state of California, but who occasionally perform work in the state of California for a California-based company?

In Sullivan v. Oracle Corp., on June 30, 2011, the California Supreme Court ruled unanimously that the overtime provisions of the California Code applied to work performed in the state by three employees who were not California residents. The ruling, however, is limited to California-based employers.

The court concluded that three instructors who worked for Oracle Corp., a company headquartered in California, were entitled to overtime pay for any work exceeding eight hours in a workday, as required by state law, even though two of the instructors lived in Colorado and the third lived in Arizona. The three instructors primarily worked in their home states, though they also worked in California and other states.

California’s overtime laws do not distinguish between resident employees and nonresidents, and there is no genuine conflict between those laws and the overtime laws of Arizona and Colorado, California’s Supreme Court found. The Court added that, even if such a conflict exists, application of California law is required because the state’s interests would be most impaired if its policy were subordinated to that of Arizona and Colorado.

Employers should make sure that they have an up-to-date policy and monitor hours closely. In addition, it is important for employers to keep good records of who is working and when they are working.