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socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 37846
Experience:  Retired (mostly)
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I will be working in California as a sort of one-person operation

Customer Question

I will be working in California as a sort of one-person operation for a company based in New Jersey. I will be an employee of this New Jersey-based company, but my place of work and residence will be in California. My employer said that the state of California caused some trouble regarding a similar set-up for a former colleague aof mine few years ago. Any insight on California labor laws in this regard?
Submitted: 5 years ago.
Category: California Employment Law
Expert:  socrateaser replied 5 years ago.

Sorry for the delay, but I was out of office yesterday and this is the first I've seen of your question.

Various issues under an employment agreement may be subject to California law, as a matter of public policy, or subject to the parties' mutual agreement, under the employment contract. Example: ] Employee worked in California for a subsidiary of German Corporation. He sued the parent German Corporation for breach of a stock option agreement. That agreement provided it was to be governed by German law and that Hamburg, Germany, was to be "the place of jurisdiction." Suit in California was dismissed: "California law does not prohibit parties to a contract to voluntarily and freely agree to another forum and the law governing there." Intershop Communications AG v. Sup.Ct. (Martinez) (2002) 104 Cal.App.4th 191, 201, 127 Cal.Rptr.2d 847, 854.

In contrast, however, an employee working in California is subject to the protections of California unemployment, SDI and workers compensation laws, and an employer cannot simply hide behind an agreement with the employee to be subject to another jurisiction's laws, as a means of avoiding liability in California.

In short, the employer must pay your benefits under a payroll plan that contributes to the California Employment Development Department (EDD), rather than the New Jersey equivalents. Nor can the employer avoid paying overtime in compliance with California requirements (which are much better for an employee than those available in New Jersey). But, for other portions of the employment contract, such as a particular contract benefit, not controlled by California public policy, the parties are free to agree to whatever they negotiate between themselves.

That said, a contract that is not governed by California law, will almost certainly make dispute resolution so difficult for the employee, that for the employee to prevail may become impossible due to the increased enforcement costs. Thus, the average employee would be poorly served, generally, to agree to such an employment agreement.

Hope this helps.

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