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Second District Holds That Piece Rate Employees Must Be Paid Separate Hourly Minimum Wage

In Averaging, Cal. State Court, Class Actions, Experts, Minimum Wage, Piece Rate, Use of Experts to Show Class Damages on April 2, 2013 at 4:02 pm
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mercedes-driver at it’s best (Photo credit: *MarS)

Today the Second District ordered published Gonzalez v. Downtown LA Motors, LP, et al., Case No. B235292, __ Cal. App. 4th __ (2d Dist. Mar. 6, 2013).  Gonzalez is a wage and hour class action where the question presented was whether California’s minimum wage law requires an employer that compensates its automotive service technicians on a “piece-rate” basis for repair work must also pay those technicians a separate hourly minimum wage for time spent during their work shifts waiting for vehicles to repair or performing other non-repair tasks directed by the employer.  Defendant automobile dealership contended it was not required to pay the technicians a separate hourly minimum wage for such time because it ensured that a technician’s total compensation for a pay period never fell below what the employer refers to as the “minimum wage floor” — the total number of hours the technician was at work during the pay period (including hours spent waiting for repair work or performing non-repair tasks), multiplied by the applicable minimum wage rate.  The employer supplemented pay, if necessary, to cover any shortfall.

The Court of Appeal concluded that class members were entitled to separate hourly compensation for time spent waiting for repair work or performing other non-repair tasks directed by the employer during their work shifts, as well as penalties under Labor Code section 203, subdivision (a).

The Court also affirmed the award of waiting time penalties in the amount of $237,840.

There is substantial evidence in the record to support an implied finding of willfulness. Although DTLA stated that its policy was to supplement its technicians’ pay when flag hour compensation fell below the minimum wage floor, there was evidence that DTLA did not always follow this policy. DTLA’s expert witness testified that he reviewed technicians’ pay records and found instances when DTLA failed to cover shortfalls between piece-rate wages and the minimum wage floor. DTLA’s failure to do so was a sufficient basis for the imposition of penalties under Labor Code section 203. The trial court accordingly did not err by awarding such penalties.

Judges and Attorneys

Associate Justice Victoria M. Chavez wrote the opinion for the court, with Presiding Justice Roger W. Boren and Associate Justice Judith Ashmann-Gerst concurring.  Appeal was taken from a judgment of Hon. Mary H. Strobel of the Superior Court of Los Angeles County.

Dickstein Shapiro, Arthur F. Silbergeld and Jennifer A. Awrey; Greines, Martin, Stein & Richland, Robin Meadow, Cynthia E. Tobisman, and Alana H. Rotter for Defendants and Appellants.

Gartenberg Gelfand Hayton & Selden and Aaron C. Gundzik; Law Offices of Neal J. Fialkow and Neal J. Fialkow for Plaintiffs and Respondents.

Curiale Hirschfeld Kraemer LLP and Felicia R. Reid for National Automobile Dealers Association as Amicus Curiae on behalf of Defendants and Appellants.

Nossaman LLP and John T. Kennedy for California Automotive Business Coalition as Amicus Curiae on behalf of Defendants and Appellants.

Fine, Boggs & Perkins LLP, John P. Boggs and David J. Reese for California New Car Dealers Association and Alliance of Automobile Manufacturers as Amicus Curiae on behalf of Defendants and Appellants.

Altshuler Berzon LLP, Eve H. Cervantez and Eileen B. Goldsmith for California Employment Lawyers Association as Amicus Curiae on behalf of Plaintiffs and Respondents.

By CHARLES H. JUNG

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  1. […] The Court of Appeal concluded that class members were entitled to separate hourly compensation for time spent waiting for repair work or performing other non-repair tasks directed by the employer during their work shifts, as well as penalties under Labor Code section 203, subdivision (a).  You can read more about the Gonzalez opinion here. […]

  2. […] The Court of Appeal concluded that class members were entitled to separate hourly compensation for time spent waiting for repair work or performing other non-repair tasks directed by the employer during their work shifts, as well as penalties under Labor Code section 203, subdivision (a).  You can read more about the Gonzalez opinion here. […]

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