The recent case Gonzalez v Downtown LA Motors, LP (2013) is an important ruling on the wages and compensation law, favorable to employees of automotive repair shops and clarifying the California minimum wage law. In that case, the employer - the automotive dealership that sold and serviced Mercedes Benz vehicles compensated its service technicians on a piece rate basis. This means that the technicians were paid on the basis of repair tasks completed and they were paid from $17 to $32 per task, depending on the technician's experience for each "flag hour" that a technician accrued actually performing those tasks. In addition to tracking those hours, the dealership also kept track of all the time that technicians spent on work site, whether they were working or were just present at their workplace. At the end of each pay period, the employer calculated how much each technician would earn if they were paid minimum wage, and if their earnings fell below that number, they would supplement the flag hour earnings to meet the minimum wage requirements.
The technicians filed a lawsuit alleging that they should be paid at least minimum wage separately for each hour that they are present at the workplace and not performing the tasks in addition to their per-task compensation.
The court sided with the employees, noting that California law requires that employees be compensated for each hour worked. In its discussion, the court illustrated why the employer's manner of compensation in this case resulted in unfair compensation by way of example: one worker who completes 4 hourly tasks at $20/task would earn $80 after 4 hours; the second worker who works the same task hours but remains on the job for additional 4 hours after completing the tasks would also be paid $80. However, averaging the wages of both technicians over an 8 hour day would show that the second technician was only paid $10/hour. This would be in contradiction of California Labor Code section 223, where the employee would not actually be paid for all hours worked - all the hours that employee had to be present at the workplace and was not free leave or engage in his personal matters. `
The technicians filed a lawsuit alleging that they should be paid at least minimum wage separately for each hour that they are present at the workplace and not performing the tasks in addition to their per-task compensation.
The court sided with the employees, noting that California law requires that employees be compensated for each hour worked. In its discussion, the court illustrated why the employer's manner of compensation in this case resulted in unfair compensation by way of example: one worker who completes 4 hourly tasks at $20/task would earn $80 after 4 hours; the second worker who works the same task hours but remains on the job for additional 4 hours after completing the tasks would also be paid $80. However, averaging the wages of both technicians over an 8 hour day would show that the second technician was only paid $10/hour. This would be in contradiction of California Labor Code section 223, where the employee would not actually be paid for all hours worked - all the hours that employee had to be present at the workplace and was not free leave or engage in his personal matters. `
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