In California it used to be that workers could be paid on a piece rate or flag rate for all the hours in a work week without being paid piece rate overtime. This meant that worker’s base pay would depend on how many hours of work they performed on commissioned time known as a piece or flag rate. Often times routine non-repair work such as cleaning the shop or making reports would not be paid so long as the workers made enough flag hours to cover more than the minimum wage. If the workers were unable to perform enough work to make their hourly average for a pay period at $8 per hour the employer would add to the wage so that the worker earned at least $8 per hour, as well as any necessary overtime.

However, last month the California Court of Appeals rejected this longstanding approach to the flag rate in California. In the Gonzalez v. Downtown L.A. Motors, L.P. case auto technicians at Downtown LA Motors (DTLA) were paid based on flag hour rates when they performed repair work. The employees were not permitted to leave the premises and were expected to perform other tasks such as cleaning, ordering parts, and training while no repair work was available. The mechanics sued alleging that they were not being paid for non-repair work, even though DTLA would ensure that their wages for two week work periods always totaled at least the minimum wage. The court of appeals held that the mechanics were not properly compensated.

The court based its decision on the argument that federal wage law is far less strict than California wage law. Although employers may pay their workers based only on flag rates as long as they ensure that the workers earn minimum wage averaged over all hours in the work week under the Federal Fair Labor Standards Act; California law requires employees performing non-flag rate tasks to be paid at the minimum wage regardless of the total amount paid to them in the work week.

This case means that employers paying at flag rates must specifically pay workers while performing non-flag rate tasks and the rate for non-flag work must take minimum wage and overtime pay into consideration. Because this case has far reaching implications for the way flag rate employees are paid throughout the state the decision will likely be appealed.

If you are a flag rate employee in the auto repair industry or any other industry you may be entitled to a lawsuit or settlement to reclaim your unpaid wages. To learn more schedule a free consultation with the California employment attorneys at Cunningham Law, APC.  Call (951) 213-4786 today.

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