Tag 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

Advertisements
Tagged , , , , , , , , , , ,

Surprising Side Effect of the Minimum Wage: Finishing High School

This is a history of minimum wage increases un...
Image via Wikipedia

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

Enhanced by Zemanta
Tagged , , , , , , ,

Central District Remands Minimum Wage and Overtime Class Action for Failure to Satisfy CAFA Amount in Controversy

Parking Lot
Image by Roger Smith via Flickr

The Central District remanded a putative minimum wage and overtime class action suit in Munoz v. Central Parking Sys., Inc., No. CV 10-6172 PA (RCx), 2010 WL 3432239 (C.D. Cal. Aug. 30, 2010) (unpublished).

Plaintiff’s complaint attempted to avoid removal, stating “[i]t is believed that the total sum owed to the Class alleged herein is less than $5 million, based upon the anticipated size of the Class and the amount in controversy for each member of the Class.”  Id. *1. Continue reading

Tagged , , , , , , ,

Southern District Rejects Argument That Wage Order 7-2001 Invalid

A CVS pharmacy in Southside Place, Texas, form...
Image via Wikipedia

In Kilby v. CVS Pharmacy, Inc., Civil No. 09cv2051-L(CAB), 2010 WL 3339464 (S.D. Cal. Aug. 23, 2010) (slip op.) Defendant argued that provisions of Wage Order 7-2001 were invalid because the IWC, before adopting any new rules, regulations or policies, was required by Labor Code section 1173 to consult with the California Occupational Safety and Health Standards Board to determine areas of potential overlap, which it is alleged to have failed to do because it delegated too much to the staff. Id. *2.  The court rejected this argument, agreeing with the California Court of Appeal in California Manufacturers Association v. Industrial Welfare Commission, 109 Cal. App. 3d 95, 122-23 (1980).

Defendant also argued that the action should be dismissed because the pertinent provision of Wage Order 7-2001 is not incorporated into Labor Code Section 1198. Section 1198 provides: Continue reading

Tagged , , , , , , ,

Labor Department Has Hired 250 New Wage-and-Hour Investigators, Representing a Staff Increase of One-Third

The seal of the United States Department of Labor.
Image via Wikipedia

As reported by Robert Pear of the New York Times yesterday, the Department of Labor has bulked up its staffing of wage and hour   investigators by one-third, or 250 investigators.  Mr. Pear reports that the Obama administration is paying particular attention to the pay practices in the healthcare industry “after finding that many hospitals and nursing homes do not pay proper overtime to nurses and other employees who work more than 40 hours a week.”

By CHARLES H. JUNG

Enhanced by Zemanta
Tagged , , , , , , ,

Rep. Linda Sanchez Introduces Legislation to Extend Minimum Wage and Overtime Protections to Home Care Workers

DETROIT -  JANUARY 4: U.S. Rep. Linda Sanchez ...
Image by Getty Images via @daylife

This week, Rep. Linda Sanchez (D-CA) introduced legislation that would extend the federal minimum wage and overtime protections of the Fair Labor Standards Act (FLSA) to most home care workers.  See the report from The Hill.

By CHARLES H. JUNG

Enhanced by Zemanta
Tagged , , , , , ,

Third District Holds that Employer May Recover Fees for Defense Against Allegation of Wrongly Denied Rest Periods

Labor law concerns the inequality of bargainin...
Image via Wikipedia

In a case with serious implications for Plaintiff’s wage & hour attorneys, the Third District Court of Appeal held that an employer may recover its attorneys fees in a case alleging wrongful denial of rest breaks.  In Kirby v. Immoos Fire Protection, Inc., 2010 WL 2910075 (Cal. Ct. App. 3 Dist. July 27,2010) two former employees challenged an award of attorney’s fees to an employer who successfully defended against allegations of labor law violations. Plaintiff-Appellants Anthony Kirby and Rick Leech, Jr. sued Respondent-Defendant Immoos Fire Protection, Inc. as well as 750 Doe defendants for violating various labor laws as well as the unfair competition law (Bus. & Prof.Code, § 17200 et seq.). Plaintiff dismissed the case after the trial court denied class certification.

Judge Loren McMaster of the Sacramento Superior Court subsequently awarded $49,846.05 in attorney’s fees to Defendant for its defense of the first, sixth and seventh causes of action.  The first cause of action sought recover for violations of the UCL.  The third cause of action alleged that Immoos failed to pay overtime compensation, as required by sections 204.3, 510, and Industrial Wage Commission Order No. 16-2001 (Order No. 16-2001).  The sixth cause of action alleged that Immoos failed to provide Kirby with rest periods as required by Order No. 16-2001.  The Third District Court of Appeal reversed, allowing reasonable fees for the sixth cause of action only.

Defendant moved to recover attorney’s fees from Plaintiff pursuant to Labor Code section 218.5. Plaintiff opposed the motion arguing, in part, that the unilateral fee-shifting provision in favor of plaintiffs provided by Labor Code section 1194 barred an award of fees to Immoos.

Section 218.5 provides in pertinent part: “In any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, the court shall award reasonable attorney’s fees and costs to the prevailing party if any party to the action requests attorney’s fees and costs upon the initiation of the action…. [¶] This section does not apply to any action for which attorney’s fees are recoverable under Section 1194.”

Section 1194 provides in relevant part: “Notwithstanding any agreement to work for a lesser wage, any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney’s fees, and costs of suit.”

The trial court concluded that it is “apparent from the express language of … section 218.5, that only section 1194 can defeat a prevailing party employer’s entitlement to attorneys’ fees under that statute, under the rule of statutory construction, expressio unius est exclusio alterius-the expression of one thing is the exclusion of another.”  “As only [section] 1194 is named as an exception to 218.5, no other Labor Code sections may be implied to defeat a prevailing party employer’s entitlement to attorneys’ fees under that section.”

In addition to the fees allowed for defense against the complaint, the trial court awarded Immoos fees for bringing the motion for attorney’s fees.  Altogether, attorney’s fees were awarded to Immoos in the amount of $49,846.05.

The Court of Appeals concluded that the trial court did not err in awarding fees to Defendant for the sixth cause of action.  However, the court erred in awarding attorney’s fees for defense against claimed violations of section 2810 as set forth in the first and seventh causes of action.

Plaintiff argued that fees should not be awarded since section 218.5 includes an express exception to its bilateral fee-shifting provision, which states: “This section does not apply to any action for which attorney’s fees are recoverable under Section 1194.” Arguing that an “action” refers to an entire case, Kirby concluded that the inclusion of causes of action subject to section 1194 bars Immoos’s recovery of any attorney’s fees in this case.  The Court rejected the argument.

The Court construes the “section 1194 exception as applying only to causes of action for unpaid minimum and overtime wages.”  Id. at *6. “To adopt Kirby’s statutory construction would allow the exception of section 1194 ‘s unilateral fee shifting to eviscerate the rule of section 218.5.”  Id.

We harmonize sections 218.5 and 1194 by holding that section 218.5 applies to causes of action alleging nonpayment of wages, fringe benefits, or contributions to health, welfare and pension funds. If, in the same case, a plaintiff adds a cause of action for nonpayment of minimum wages or overtime, a defendant cannot recover attorney’s fees for work in defending against the minimum wage or overtime claims. Nonetheless, the addition of a claim for unpaid minimum wages or overtime does not preclude recovery by a prevailing defendant for a cause of action unrelated to the minimum wage or overtime claim so long as a statute or contract provides for fee shifting in favor of the defendant.

Id.

Since Plaintiff’s sixth cause of action alleged that Plaintiff was “owed an additional one hour of wages per day per missed rest period” the court concluded that it was a claim seeking additional wages.  Therefore section 218.5’s provision of attorney’s fees for “any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions…” applied.  Id. **7-8.

It is now common practice to include a rest break claim in wage & hour complaints.  Plaintiffs attorneys will need to seriously reconsider whether they will continue this practice or risk bearing defendant’s fees in an unsuccessful claim.

By CHARLES H. JUNG

Enhanced by Zemanta
Tagged , , , , , , ,
Advertisements