FOR years, Oracle Corp., a California software company, employed Instructors. The Instructors’ primary job was to train Oracle’s customers in the use of the company’s products. Oracle did not pay its Instructors overtime. Oracle believed that its Instructors were exempt, as teachers, from California and federal overtime laws.
In 2003, Oracle’s Instructors sued the company in a federal class action alleging misclassification and seeking unpaid overtime compensation. Shortly thereafter, Oracle reclassified its Instructors and began paying them overtime. In 2005, the federal class action was settled and the claims of the plaintiff class were dismissed. However, there remained the question of whether Oracle’s non-resident Instructors who lived out of state but who worked in California were entitled to overtime pay.
Donald Sullivan, Deanna Evich and Richard Burkow formerly worked as Instructors for Oracle. Sullivan and Evich resided in Colorado, and Burkow resided in Arizona. They were required by Oracle to travel, mainly in their home states but also in California and several other states. These employees had worked complete days and weeks in California, but were not residents of California.
California’s overtime law states that employees who work more than 8 hours per day or more than 40 hours in a week are entitled to be paid overtime. Overtime compensation is computed at 1.5 times the employee’s regular rate and is multiplied by the number of hours in excess of 8 hours per day. If the overtime hours exceeds 12 hours per day or exceeds 8 hours on the seventh day, overtime compensation hourly pay is computed at twice the employee’s the regular rate.
California’s employment laws are generally more favorable to employees, the minimum wage and overtime pay more generous than in some states. California’s computation of overtime, for example, includes daily overtime worked, not simply weekly overtime. Employers who are looking to reduce labor costs may resort to hiring non-California residents to work in California so they can evade California’s more protective laws. Hence, the issue of whether non-resident employees who work in California should be entitled to overtime pay has very real and far-reaching results.
The issue also has a significant economic impact on the overall labor market in California. If the overtime law does not apply to non-resident employees, it would be cheaper for employers to hire non-resident workers to work in California, to the detriment of California-resident employees.
The Supreme Court ruled that California’s overtime laws apply to all employees who worked in the state without reference to the employee’s place of residence. Any employee receiving less than the legal overtime compensation applicable is entitled to recover the unpaid balance.
The Supreme Court pointed out that even though the overtime laws speak broadly and do not distinguish between residents and non-residents, there is no uncertainty in their meanings. All protections, rights, and remedies available under state law are available to all individuals who are or who have been employees in California.
To exclude non-residents from the overtime laws’ protection would encourage employers to import unprotected workers from other states. The Court explained that: “Not to apply California law would also encourage employers to substitute lower paid temporary employees from other states for California employees, thus threatening California’s legitimate interest in expanding the job market.”
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C. Joe Sayas, Jr., Esq. is an experienced trial attorney who has successfully obtained significant results, including several million dollar recoveries for consumers against insurance companies and big business. He is a member of the Million Dollar-Advocates Forum—a prestigious group of trial lawyers whose membership is limited to those who have demonstrated exceptional skill, experience and excellence in advocacy. He has been featured in the cover of Los Angeles Daily Journal’s Verdicts and Settlements for his professional accomplishments and recipient of numerous awards from community and media organizations. His litigation practice concentrates in the following areas: serious personal injuries, wrongful death, insurance claims, unfair business practices, wage and hour (overtime) litigation. You can visit his website at www.joesayas law.com or contact his office by telephone at (818) 291-0088.
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