266 | 2023 Cal-Peculiarities ©2023 Seyfarth Shaw LLP www.seyfarth.com whether Oracle’s rationale extends to employees who work daily overtime in California for employers who are not based in California. The California Supreme Court provided guidance on these and other questions in two 2020 decisions involving airline crew members. The airline cases. Various California class actions on behalf of pilots and flight attendants hit several major U.S. airlines and wound up before three different federal judges. The actions claimed that the airlines’ complex pay systems caused them to violate California statutes mandating minimum wage, timely wage payment, and adequate wage statements. The federal judges applied different rules to reach differing outcomes. The cases found their way to the Ninth Circuit, which referred five issues to the California Supreme Court: (1) Does the Railway Labor Act exemption in Wage Order 9 (for transportation workers) bar a wage statement claim by an employee who is covered by a collective bargaining agreement? (2) Does Labor Code section 226 apply to wage statements provided by an out-of-state employer to an employee who resides in California, receives pay in California, and pays California income tax on wages, but who does not work principally in California or any other state? (3) Do section 226 and the statute on timely wage payment (Labor Code section 204) apply to wage statements and wage payments provided by an out-of-state employer to an employee who, in the relevant pay period, works in California only episodically and for less than a day at a time? (4) Does California minimum wage law apply to all work performed in California for an out-of-state employer by an employee who works in California only episodically and for less than a day at a time? (5) Does the Armenta/Gonzalez bar on averaging wages apply to a pay formula that generally awards credit for all hours on duty, but that, in certain situations resulting in higher pay, does not award credit for all hours on duty? In addressing these questions, the California Supreme Court shared some general observations: “When it comes to regulating interstate employment, it is not sufficient to ask whether the relevant law was intended to operate extraterritorially or instead only intraterritorially, because many employment relationships and transactions will have elements of both. The better question is what kinds of California connections will suffice to trigger the relevant provisions of California law.”600 “The connections that suffice for purposes of one statute may not necessarily suffice for another. There is no single, all-purpose answer to the question of when state law will apply to an interstate employment relationship or set of transactions. As is true of statutory interpretation generally, each law must be considered on its own terms.”601 The geographic scope of Labor Code section 204 (requiring timely wage payment) and Labor Code section 226 (requiring itemized wage statements) should be the same. The two statutes work “hand in hand” in that “Section 226 regulates the information an employer must provide in connection with wage payments, while Section 204 regulates when an employer must pay an employee for hours worked. … [W]hen an employee must be paid (the subject of § 204), and what information must accompany each such required payment (the subject of § 226) are necessarily linked.”602 For purposes of the geographical scope of section 226, no weight is assigned to the employee’s residence, where the employee receives wages, where the employee pays taxes, or the employer’s location (as opposed to the employee’s base of operations).603
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