Separate Compensation of Rest Breaks in Piece-Rate System Confirmed

In the matter of Jimenez-Sanchez v. Dark Horse Express, Inc. (F072599), the court confirmed that employees paid on a piece-rate basis required additional, separate compensation for rest breaks. The defendant in the case was Dark Horse Express, Inc. (“Dark Horse”), a trucking company that employed drivers to transport milk and other goods within California. Dark Horse’s employees were paid on a piece-rate basis for each load delivered but were not separately compensated for certain “nonproductive” work activities, including rest breaks, vehicle inspections, truck washing, delays beyond the driver’s control, and other activities not incidental to the piece rate.

The plaintiffs asserted numerous wage-and-hour violations, including that Dark Horse’s piece-rate system of pay failed to compensate employees for all hours worked; failed to authorize or permit rest breaks by not separately compensating for them at an hourly rate; and failed to provide for or schedule uninterrupted meal breaks, among others. The appeal arose out of the Jimenez plaintiffs’ motion for class certification of all drivers employed by Dark Horse.

The trial court denied plaintiffs’ motion for class certification on the grounds that the plaintiffs’ claims did not present predominantly common issues suitable for determination on a class basis. In particular, the trial court found that the drivers’ contracts with Dark Horse were not uniform, and the plaintiffs’ claims gave rise to individual issues unique to each contract, such as what particular tasks were included in any given piece rate.

However, the Court of Appeal determined that the basis for the trial court’s ruling was flawed, and reversed and remanded the matter back to the trial court. While the trial court determined that the drivers were compensated for “nonproductive” time, which it decided included rest breaks, it never analyzed the issue of whether the drivers were properly compensated for rest breaks on a separate basis. The court of appeal determined that the trial court’s decision was based on improper criteria or erroneous legal assumptions that the law pertaining to “nonproductive” time was equally applicable to rest breaks.

In so doing, the court relied upon the holding in Bluford v. Safeway Inc. (2013) 216 Cal.App.4th 864 rather than California Labor Code 226.2, due to the fact that the latter had not taken effect until after the trial court’s ruling. Bluford v. Safeway Inc. (2013) 216 Cal.App.4th 864 was directly on point with regard to Jimenez, having specifically held that rest periods must be separately compensated in a piece-rate system at a rate at least equivalent to the minimum wage.

The Court of Appeal in Jimenez therefore ruled that the plaintiffs’ claims for separate compensation for rest breaks presented some common factual and legal issues that should have been considered by the trial court in determining whether class certification was appropriate, and confirmed that employees paid on a piece-rate basis need to also be separately compensated for any rest breaks.

This case is a reminder of California law which does not allow “nonproductive” work time or rest breaks to be included with productive work time when determining whether a piece-rate employee has been paid at least minimum wage. Accordingly, when a piece-rate employee is engaged in nonproductive work, that nonproductive work time must be separately compensated at a rate at least equal to minimum wage for all hours worked.

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February 19, 2019