Here's an interesting article from the San Francisco Bay Guardian about the Orphanage, a San Francisco visual effects house. In a nutshell, because they're located in space rented from the federal government at the Presidio, and because the Presidio is federal property, then state and local labor law apparently don't apply. Which means the minimum wage there is $5.15, and 20-hour shifts can be demanded at will . . .
Here's a key quote:
At one point, Seeley charges, he was asked to work a 20-hour shift — and return to work two and a half hours later. When he didn't come in, he was fired. Seeley sued, and the case was eventually settled. But along the way, the lawyers for the Orphanage raised a startling argument: since the Presidio is a federal enclave, they said, California labor law, which restricts the length of shifts, doesn't apply.
When I was doing my medical internship at the Wadsworth VA Hospital in Los Angeles, there were drug dealers who made sure to only operate on the VA grounds. That seemed odd to me, until someone explained that by doing so they were completely safe from arrest and prosecution from city and state law enforcement. It seemed the feds weren't exactly worried about drug dealers on federal property, and these dealers operated in plain sight.
Apparently, the same logic applies here. Federal labor law is meager compared to California state labor law, so why not rent space from the feds, and get an extra bonus at the expense of employees?