On July 6, 2020, the California Supreme Court handed down clarity on the application of California’s wage and hour laws to employees who work primarily outside of California. In Oman v. Delta Air Lines, Inc., four Delta flight attendants filed a class action alleging that Delta failed to pay them at least the minimum wage for all hours worked. The flight attendants also alleged that Delta failed to pay them within the required semi-monthly time frame under Labor Code section 204 and to provide comprehensive wage statements pursuant to Labor Code section 226. Delta successfully defended against all claims.
According to the lawsuit, Delta paid its employees based on a compensation structure which uses the highest paying of four potential formulas to compensate flight attendants by flight rotation, rather than by the hour. Although unusual, the Court found this compensation structure lawful because this structure allowed the flight attendants to be paid above the minimum wage. Also important, the Court emphasized that California law does not allow employers to engage in wage averaging. For each hour worked, employees are entitled either to the amount guaranteed by contract for the specified task or period or the minimum wage, whichever is greater.
Further, the Court rejected the flight attendants’ argument that California Labor Code section 204 and section 226 require comprehensive wage statements and wage payment for all time worked in California. The Court held that these laws only apply to employees whose base of operations are in California or for pay periods in which an employee works predominantly inside of California. Therefore, these laws do not apply to employees who are based outside of California, or only work occasionally in California.
COUNSEL TO MANAGEMENT:
This decision is a reminder to employers with employees who work in California only periodically, that compliance with California wage and hour laws may not be appropriate. Employers should work with competent counsel to discuss the structure and daily operations of your business to determine the controlling law. If you have any questions about the application of California wage and hour laws, contact the experts at The Saqui Law Group, a division of Dowling Aaron Incorporated.