Category Archives: Minimum Wage

Employers Must Pay Piece Rate Workers Separate Hourly Compensation, Even Where Employer Maintains Minimum Wage Floor

Mercedes-Benz Motor Shop

Mercedes-Benz Motor Shop (Photo credit: Visionstyler Press)

The Second District published today 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).  You can read more about the Gonzalez opinion here.

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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Surprising Side Effect of the Minimum Wage: Finishing High School

This is a history of minimum wage increases un...
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The National Bureau of Economic Research report suggests a surprising effect of the minimum wage: finishing high school.  As reported by Kevin Lewis of the Boston Globe:

By curtailing low-wage/low-skill jobs, the minimum wage motivates young people to stay in school and become skilled. This effect then generates what the author calls an “educational cascade” by setting an example for the upcoming class of students. He estimates that the average male born in 1951 gained 0.2 years — and the average male born in 1986 gained 0.7 years — of high school due to the cumulative effect of the minimum wage.

Sutch, R., “The Unexpected Long-Run Impact of the Minimum Wage: An Educational Cascade,” National Bureau of Economic Research (September 2010).

By CHARLES JUNG

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In an Involuntary Servitude Case, Northern District Dismisses FLSA and California Labor Code Claims

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The Northern District dismissed plaintiffs’ FLSA and California Labor Code claims in an involuntary servitude case.  Shuvalova v. Cunningham, No. C 10-02159 RS, 2010 WL 5387770 (N.D. Cal. Dec. 22, 2010).  The case involved the “unusual scenario of one spouse bringing claims against the other for alleged violations of the Trafficking Victims Protection Reauthorization Act (TVPRA).” Id. *1.  Natalya Shuvalova and her daughter Elizabeth Shuvalova claimed that defendant and his adult son fraudulently lured them from Russia to the United States, induced Natalya to marry one defendant, and then forced plaintiffs into involuntary servitude at defendant’s rural property in Clearlake, California.  Id. Plaintiffs claimed that for seven months, they were forced by defendants’ alleged verbal and physical threats to perform heavy, outdoor labor on the property. Id. Plaintiffs raised eighteen claims for violations of the TVPRA, federal and state labor law, and state contract and tort law.  Id. Defendants moved to dismiss the entire complaint under Rule 12(b)(6).  Id.

Background

The court presented the allegations of the complaint as follows:

Natalya and Joe met through a computer dating service in October 2005. At the time, Natalya lived in Russia and Joe lived then and now in Clearlake, California. They began a two-year relationship involving frequent emails and phone calls, as well as two vacations together each lasting two weeks. In October 2005, [FN1] Joe proposed to Natalya and promised to provide a loving home to her and her daughter Liza. Natalya and Liza arrived in the United States in February 2008 and began living with Joe at the Clearlake property. Joe’s thirty-five-year-old son, Dan, also lived at the house on the weekends. Natalya and Joe married on May 3, 2008. . . . Continue reading

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