California Law Doesn’t Apply to Wage Claims on Oil Drilling Platform

 

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Federal employment laws apply to an offshore drilling rig worker's wage and hour claims for time he spent on a platform located more than three miles from the California coast, according to the U.S. Supreme Court.

In Parker Drilling Management Service, Ltd. v. Newton, the Supreme Court was asked to decide whether federal law or California's more-generous wage and hour laws covered an employee who worked 14 days at a time on a drilling platform. He worked 12-hour shifts, which were followed by 12 hours of rest, though he needed to be on-call when off duty.  

While the federal Fair Labor Standards Act (FLSA) only requires workers to be paid for actual hours worked, California law entitles workers to compensation for call-in or stand-by hours. The Golden State also mandates meal and rest breaks, a higher minimum wage than what federal law requires and additional overtime premiums.

[SHRM members-only how-to guide: How to Calculate Daily and Weekly Overtime in California]

The oil-rig worker filed a proposed class action arguing that he and other workers are due compensation under California law for all hours spent on the platform. The employer, however, asserts that federal law applies under the Outer Continental Shelf Lands Act (OCSLA) and that workers were properly paid under the FLSA.

In a unanimous opinion June 10, the high court found that state law only covers the outer continental shelf if federal law doesn't address the relevant issue.

"Given the primacy of federal law on the [outer continental shelf] and the limited role of state law, it would make little sense to treat the [outer continental shelf] as a mere extension of the adjacent state, where state law applies unless it conflicts with federal law," wrote Justice Clarence Thomas for the court.

We've rounded up the latest news on this topic from SHRM Online and other trusted outlets.

What Is the OCSLA?

Under the OCSLA, states generally control the area within three nautical miles of the coast, whereas the outer continental shelf (where the oil platform in this case is located) is controlled by federal law. State law may be applied to the outer continental shelf under the act when it is "applicable" and "not inconsistent with" federal law. In the current case, the 9th U.S. Circuit Court of Appeals held that California wage and hour laws apply on the platform because the state laws are not inconsistent with or pre-empted by federal law. However, the ruling deviated from a 1969 5th Circuit ruling, where the court held that state law only applies under the OCSLA when there is an unanswered question under federal law and state law can fill in the gap.

(SCOTUSblog)

Appellate Court's Ruling Vacated

The Supreme Court vacated the 9th Circuit and held that federal law applies to the wage and hour claims in this case. Thomas wrote that "federal law is the only law" that applies on the outer continental shelf and "there has never been any overlapping state and federal jurisdiction there." So the question in the case, according to Thomas, was whether federal law addressed off-duty time spent on the oil rig. The justices said that federal law does address off-work hours and doesn't require employers to compensate workers for that time.  

(The Seattle Times)

California Imposes Strict Wage and Hour Laws

Employers with operations off the coast of California would face complicated workplace compliance challenges if the higher court were to side with the worker in this case. The Golden State has long provided fertile ground for employment lawsuits, because the state has strict workplace rules that businesses must follow. And in the last year, several rulings by the California Supreme Court have made matters even more difficult for employers. Here are some of the key cases affecting employers in the state.

(SHRM Online)

6 FAQs on California's Meal and Rest Break Rules

California's meal and rest break rules are extremely technical and nuanced—and failing to comply with them can result in penalties. Here are answers to six frequently asked questions regarding compliance with this intricate area of California labor and employment law. 

(SHRM Online)

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