210 Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) Seyfarth Shaw LLP | www.seyfarth.com (4) Does California minimum wage law apply to out-of-state employers for the California work that their employees perform in California only episodically and for less than a day at a time?1011 (5) Does California’s rule preventing pay-averaging for employees paid by commission or piece rate apply to a pay formula that generally awards credit for all hours on duty, but that does not always award pay credit for all hours on duty?1012 In the underlying lawsuits, United pilots and Delta flight attendants claimed that the airlines violated California Labor Code provisions on wage statements, minimum wage, and the timing and completeness of wage payments. United (based in Chicago) and Delta (based in Atlanta) both won at the district court level, successfully arguing that de minimis work within California does not trigger California law, especially when (i) the employers are not based in California, (ii) the employees work only limited amounts of time in the state, and (iii) the employees mostly work in federal air space and in multiple jurisdictions during a single pay period or even a single day.1013 In June 2020, the California Supreme Court issued twin decisions addressing these issues. First, the Supreme Court ruled that the Railway Labor Act exemption in IWC Wage Order 9 for transportation employees covered by a collective bargaining agreement does not bar a wage statement claim brought under Section 226. The Supreme Court reasoned that, because the language of the statute does not include the exemption, the Legislature did not intend for it to apply. “Given the number of times the Legislature has revisited and revised section 226 since the Railway Labor Act exemption was first promulgated in 1976, we can be sure that the Legislature’s failure to adopt the exemption is not for want of attention to the statute.”1014 Next, the Supreme Court considered whether employees who work both inside and outside of California during a pay period must be issued wage statements that comply with Section 226. The Supreme Court stated the key question as “what kinds of California connections will suffice to trigger the relevant provisions of California law[?]” Significantly, “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.”1015 Ultimately, the Supreme Court decided not to make its determination on the basis of where the employee resided, received wages or paid taxes, or where the employer was located. Rather, the Supreme Court found that the key inquiry was “whether the employee’s principal place of work is in California.”1016 Thus, to determine if Section 226’s requirements applied to a specific employee who worked in multiple states during a pay period, the first inquiry 1011 Id. 1012 Id. 1013 Oman v. Delta Air Lines, Inc., 230 F. Supp. 3d 986 (N.D. Cal. 2017): Ward v. United Air Lines, Inc., 2016 WL 3906077 (N.D. Cal. July 19, 2016). 1014 Ward v. United Airlines, Inc., 9 Cal. 5th 732, 466 P. 3d 309, 315 (2020). 1015 Id. at 316, 319. 1016 Id. at 320.
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