In California, labor law mandates that employers must separately pay at least minimum wage for each hour worked, unlike the federal Fair Labor Standards Act (FLSA), which allows for averaging total compensation over a pay period. Last year, the California Supreme Court approved a line of cases establishing this rule, including the Certified Tire and Service Centers Wage & Hour Cases. In this case, an employer's compensation program for automotive technicians, which paid them the greater of a guaranteed minimum hourly rate or a base hourly rate based on "production dollars," was challenged. While the majority of the court found that the program did not violate the "no wage borrowing" rule, a dissenting opinion argued that it resembled a commission pay program that impermissibly borrowed from commission-generating activity to pay for non-productive tasks. Click here for article.
California labor law requires employers to separately pay at least minimum wage for each hour worked, unlike the FLSA.
In the Certified Tire and Service Centers Wage & Hour Cases, an employer's compensation program for automotive technicians was challenged.
The program paid technicians the greater of a guaranteed minimum hourly rate or a base hourly rate based on "production dollars."
The majority of the court found that the program did not violate the "no wage borrowing" rule, while a dissenting opinion argued otherwise.
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