Seyfarth Synopsis: The
California Court of Appeal has upheld the validity of pay plans
that guarantee a wage that meets or exceeds the minimum wage for
all hours worked during a pay period, but that also enables the
employees to earn higher pay based on certain production
metrics.
The Facts
In several coordinated wage and hour class actions, technicians
working for Certified Tire and Services Centers, Inc. sued for
unpaid minimum wages and rest periods. The technicians claimed that
Certified Tire’s Technician Compensation Program
(“TCP”) was an unlawful “activity-based
compensation system” because it failed to pay separately for
time spent on repair tasks and for rest periods. The technicians
claimed that, under the TCP, Certified Tire improperly sought to
“average” the hourly rate to comply with minimum wage
requirements.
