Gonzalez v. Downtown LA Motors, LP, 215 Cal. App. 4th 36 (2013)

DTLA compensates its 108 automotive service technicians on a piece-rate basis by which they are paid a flat rate ranging from $17 to $32 per hour for each "flag hour" a technician accrued. (A DTLA technician who completes a repair task accrues the number of flag hours that Mercedes-Benz assigns to that particular task, regardless of how long the technician actually took to complete the task.) DTLA also keeps track of all time a technician spends at the work site whether or not the technician is actually working on a repair order. At the end of the pay period, DTLA calculates how much each technician would earn if paid an amount equal to his total recorded hours "on the clock" multiplied by the applicable minimum wage; if a technician's flat rate/flag hour pay falls short of the "minimum wage floor," DTLA supplements the technician's pay in the amount of the shortfall. In this case, the technicians filed a putative class action against DTLA, claiming the company violated California law by failing to pay them a minimum wage during their waiting time, which averaged approximately 1.85 hours per day. The trial court ruled in favor of plaintiffs and awarded them over $1.5 million in unpaid wages and another $237,840 in penalties; the Court of Appeal affirmed, holding that under Wage Order No. 4, an employer may not average employees' compensation over the total number of hours worked to determine compliance with minimum wage obligations. Compare Choate v. Celite Corp., 2013 WL 1833015 (Cal. Ct. App. 2013) (employer owed former employees accrued but unpaid vacation benefits, but it was not liable for waiting time penalties because parties stipulated that employer "otherwise acted in good faith").