Do California’s Labor Laws Apply to Out-of-State Employers and Employees?

Each U.S. state has its own collection of labor laws that apply to employers and employees within the state. Some of these laws vary widely from state to state. For instance, California and 17 other states require employers to provide five or more days of paid sick leave to their employees, while the remaining states do not. This is just one of many variations in employment law from state to state.

Since the COVID-19 pandemic, there’s been a substantial rise in remote work, with many employers offering this as a benefit to attract qualified employees, but what happens when California employers hire remote workers who live in other states? Do California labor laws apply to those working in other states, or when employers in other states hire workers in California, which state’s laws apply?

Those Who Live in California Are Subject to California Labor Laws

In general, when an individual resides in California, they are subject to California’s comprehensive and protective labor laws regardless of where their employer is located. California laws also apply to those who are legal residents of other states but are working in California. When physically present for work in California, the state’s laws and protections apply. For instance, if a worker who lives out of state has a temporary work assignment in California, they are covered by California’s employment law during the duration of their stay.

This can quickly become challenging for employers in other states with fewer or less comprehensive labor laws since California has some of the country’s most extensive employee protections with frequent changes, updates, and additions to existing laws.

When an Employer is Located in California but a Remote Worker Lives in Another State, Do California’s Labor Laws Apply?

In most cases, when a remote worker from one state has an employer in another state, the state where they reside has jurisdiction, meaning they follow the labor laws of the state where they live regardless of where their employer is located. However, because California’s laws are so comprehensive, there are some exceptions for California employers. If the remote worker works mostly independently, California’s employment laws do not apply, but if the employer exerts a great deal of control over the employee’s daily work and they have significant daily interactions, California’s labor laws apply to that employee.

How Does California’s At-Will Employment Status Affect Remote Workers?

California is an “at-will” employment state. This status means that California employers can fire a worker at any time without requiring cause. The exceptions to this law are for workers under contract or when an employer fires someone due to a protected characteristic such as race, gender, or medical status. This can substantially impact a remote worker in a state with opposing laws. For instance, in Montana, an employer has to have just cause to fire an employee. If a Montana resident has a California employer who extends substantial daily control and interactions over their work, California’s laws apply. The Montana resident could be surprised by being let go without cause since that isn’t the practice in their state.

Handling Complex Labor Laws in California

Because California’s employment laws and protections frequently change, when adding remote work and employees in other states into the mix, it quickly becomes complicated. Employers or employees with questions about their rights and obligations under state laws should speak to an experienced Orange County employment lawyer.