Employers Must Pay Employees For Downtime Hours

On April 2, 2013, the California Court of Appeal, Second District, published an opinion that will have major implications in the employment context regarding employers who pay their employees set rates for accomplishing certain tasks in lieu of paying employees by the hour.

In Gonzalez v. Downtown LA Motors LP, 2013 DJDAR 4292 (Cal.App.2nd Dist., April 2, 2013), the California Court of Appeal held that an auto repair business who paid its mechanics a set rate rather than by the hour, while at the same time avoiding paying employees for “downtime,” namely for hours worked when they didn’t have any cars to work on, failed to meet California minimum wage standards.

The well known Downtown LA Motors LP, located in the heart of Los Angeles, California, engaged in the above-referenced practice of not paying its employees for “downtime,” and argued that it complied with minimum wage standards because it ensured workers were paid an average minimum wage amount over the course of their pay periods.  The Court of Appeal was left unpersuaded and affirmed the lower Court’s decision by concluding that employees are entitled to separate hourly compensation for the time spent waiting for repair work or for performing non-repair tasks directed by their employer during work hours.

This decision will have significant impacts on employers and employees who are engaged in paying and receiving pay based on set rates for specific tasks and not by the hour.

Should you have any questions regarding this important opinion and how your matter may be affected by the Court’s decision, please feel free to contact the Firm for further information.

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