Wednesday, July 6, 2011

Out of state,
not out of court


In a Los Angeles Times article headlined on Advisen FPN as California overtime-pay laws protect nonresidents too, court rules (read at, the newspaper reports that

"Residents of other states who work for California companies are protected by the state's overtime laws during business trips here, the California Supreme Court decided unanimously Thursday."

According to the court, "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."

The LA Times article notes that the decision impacts on non-California residents working temporarily in California for a California-based organization. The initial suit was brought by non-California employees of Oracle Corporation who "wanted to benefit from California's generous overtime law during business trips."

From a risk management standpoint, the ruling could have several consequences.

  • Companies will have to pay non-resident employees working temporarily in California at California rates.

  • More California companies needing non-resident employees will either

    • Make do without the out-of-state staffers

    • Increase tele- and video conferencing

  • Relocate their headquarters offices to another state, expensive but a one-time cost.

The California ruling may not be the "final ruling" on the matter.

Since the issue is one of "interstate commerce," the Federal courts could be asked to intervene.



In another Advisen FPN pick-up, the Las Vegas Sun reported that the Clark County commissioners agreed to pay $150,000 to settle a lawsuit brought by person diagnosed with cubicle claustrophobia. The full article as it appears on the Advisen FPN site is at



Advisen focuses on the insurance industry, but for a risk management practitioner, the articles are both interesting and often educational, certainly identifying risks normally not considered in the typical risk litany.

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