California Supreme Court Protects Workers In Overtime Pay Case

The San Jose Mercury News reports that the California Supreme Court issued a ruling today that is a victory for those who work for California companies, but live elsewhere. As experienced wage-and-hour lawyers, we want to keep our readers informed about the developments of the law in this area.

In a case involving Oracle (ORCL) which is located in Redwood City, California, and in a unanimous opinion, the California Supreme Court ruled that Oracle employees are entitled to the benefits of the state’s overtime and other worker protections. The case was brought by former employees, but applies to current employees as well who are out-of-state residents. Companies cannot avoid the stringent rules in California by hiring out-of-state residents and failing to pay them overtime wages.

In the opinion of the court, California’s labor laws with regard to overtime pay are intended to “guard against the evils of overwork.” On behalf of the court, Justice Kathryn Mickle Werdegar wrote: “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.”

Over the past decade, several former Oracle employees have battled the tech giant arguing that they should be entitled to overtime pay for training the company’s customers in other states. The company had previously classified these employees as “teachers” — in order to make them exempt from the stringent requirements that protect California workers with regard to overtime compensation.

The company said they should not have to pay these workers when the states they were providing the training in did not protect workers in this way. Several years ago, the company settled these claims, and began to pay workers acting in this capacity for overtime. But the California Supreme Court weighed in on this issue at the request of the federal court and this ruling could well have a positive impact on companies.

The ruling sends a clear message that companies should not try to avoid paying overtime wages by classifying workers erroneously. This decision is a step in the right direction for worker protections in our state.

The California wage-and-hour lawyers at Hersh & Hersh have litigated many significant cases on behalf of employees who have been harmed by their employers with regard to proper payment for overtime and other labor law violations. If you believe your employer is not paying you fairly, please contact us for a free consultation about your situation.