In a recent ruling, the California Court of Appeal upheld the notion that Californian laws apply to those whose base of work operations is in California, even if the workers come from elsewhere. This has ramifications for others, especially during the pandemic, who may be working online in CA but officially reside or work for entities in other states.
The case was Gulf Offshore Logistics, LLC v. Superior Court, in which employees brought a class action against their employers. They alleged their employers had violated several Californian laws, particularly those relating to wages and hours of work, including minimum wage and overtime.
What made the ruling significant was that the plaintiffs were seamen from Texas, Ohio, Mississippi, and employers based in Louisiana. The seamen would fly to Los Angeles, California, to work on a docked vessel. This ship would provide maintenance services to offshore oil platforms and traveled inside and outside California state boundaries.
The employers pushed for a motion that Louisiana law should be followed as that was where they were based and where the employees were hired. They argued that the federal Fair Labor Standards Act (FLSA) pre-empted California law.
However, the court of appeals rejected their arguments based on two prior cases: Ward v. United Airlines, Inc., and Oman v. Delta Air Lines, Inc. In these cases, it was established that California laws relating to hours and wages would apply when CA is the primary base of operations for employees.
The court further ruled that California employment laws were not pre-empted by the FLSA and were not in conflict with them.
The fact that the vessel occasionally sailed beyond state boundaries was deemed to have no bearing. The majority of the plaintiff's work and the ports and channels they used were all within California. The court stated: "California law governs the employment relationships at issue here because California served as the base for the crew members' work operations, all or most which were performed in California."
In the age of COVID-19, millions of employees are now working remotely. Neither they nor their employers might reside in California but might work there. The ruling implies that if the bulk of that work is conducted with CA state boundaries, Californian employment laws apply. These include paying minimum wage and overtime, providing meals and rest breaks where applicable, and complete wage statements.
Californian courts have made it clear that it favors providing state protections when possible, and it is vital for employers, no matter where they are based, to be aware of this. When it comes to companies that hire employees whose work may be based in California, it is crucial to review wage and hour policies. They will need to comply with those stipulated in California Law. Although not specified in the recent rulings, the ramifications of what was established may also apply to remote workers.
As a result of the coronavirus pandemic, vast numbers of workers are currently working online. Like the Ward and Oman cases, the Gulf Offshore decision establishes that the company base is irrelevant if the remote worker does the bulk of their work in California. It is important employers know where they stand on this issue.