When Interstate Transport Workers are Entitled to California Paycheck Protections

While each state has the power to set wage and other workplace standards for labor performed within its borders, that authority can blur when truckers and passenger carrier personnel divide their work time between the states. On several suits by pilots and flight attendants, the California Supreme Court has ruled certain interstate transportation workers are entitled to state’s protections on paychecks and paydays even for labor outside the state: Ward v. United Airlines and Oman v. Delta Airlines (June 29, 2020).

The employees, all of whom only worked part time inside the state, sought class action recovery of up to $4,000/employee for airline failure to issue California-compliant paystubs (Labor Code 226) on their wages. They argued in part that if they live and pay taxes in California, United and Delta should comply with section 226 no matter where labors were performed. Contending a state’s laws should not reach beyond its geographic boundaries, United and Delta countered they should not be responsible for such compliance when most work was performed outside California.

Observing that California’s current paycheck protection law was introduced in 1943 “at the behest of railroad employees,” many of whom worked interstate, the court found 226 paystub requirements apply when this state “is the [one] that has the most significant relationship to the work,” specifically:

• workers who perform the majority of their work in California; and
• workers who are “based” in California and do not work more than half their time in any other state. According to the court, “based” means California is the physical location where the worker presents himself or herself to begin work.

Thus for interstate haulers and carriers, the answer to the question of whether this paystub law applies to its employees is that “it depends.”

The ruling means, for example, that an Arizona hauler must comply with California’s detailed paycheck requirements (as well as the state’s accompanying twice/month minimum paydays law) for a Phoenix-based driver who spends more than half of his or her road time in California in any given pay period. No compliance is required for pay periods in which that driver spends only half or less of his/her road time in California.

The decision also requires an air carrier to comply with these paystub rules for a flight attendant based for example out of LAX but who only works a few hours in-state over any pay period. However, that carrier would not have to comply with the California rules for a New York-based flight attendant who spends comparable time flying in and out of Los Angeles.

The court was careful to explain that the application of other California labor laws to interstate workers must be analyzed on the particular language and meaning of those specific sections. Thus, as it was not critical to the case, the Oman decision found that the geographic reach of this state’s minimum wage laws to hours worked by such multi-state personnel would have to wait for a future case.

See also:

• Payday Mayday; Read the Fine Print: Payroll Companies Not Responsible for Employer Compliance (January 24, 2020)
• Correct Paystubs Save Bucks; Learn California’s Specific Paystub Requirements to Avoid Penalties (May 3, 2018)
• Paperless Paystubs; Do They Comply with California Wage Statement Laws? (February 28, 2018)
• Strike a Blow for Employers: California Expands the Exception for Listing “Hours Worked” on Paystubs (August 31, 2016)

For more information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

Tim Bowles

July 2, 2020