Labor & Employment Law Daily Wrap Up, WAGE-HOUR—MINIMUM WAGE—9th Cir.: J.B. Hunt’s piece-rate driver pay plan complied with California Labor Code, (Aug 13, 2025)

By Jason Albright, J.D.

Cal. Lab. Code § 226.2 carves out an exception—what the parties call the “‘safe harbor’ provision”—for hybrid compensation plans.

J.B. Hunt Transport, Inc. was entitled to partial summary judgment against the claims of a putative class of truck drivers who alleged that its Driver Pay Plan—which paid drivers an hourly wage supplemented with a piece-rate-based bonus—violated Cal. Labor Code § 226.2, the Ninth Circuit held. Finding that the plan qualified for the statute’s safe harbor provision, the federal appeals court held that drivers also had not shown a genuine dispute of material fact as to whether the company was otherwise liable for failing to pay them for off-the-clock work. The employer was further entitled to summary judgment against the drivers’ wage statement claims. Finally, the district court properly entered judgment after trial in favor of the employer on their business expense reimbursement claims and properly awarded the employer costs (Williams v. J.B. Hunt Transport, Inc., Nos. 24-933 and 24-2970 (9th Cir. Aug. 12, 2025)).

Labor Code § 226.2. In 2015, the California Legislature enacted California Labor Code § 226.2, which implemented new rules for employees compensated on a “piece-rate basis,” meaning the employee is compensated based on activities completed as opposed to total hours worked. Section 226.2 clarified that employees paid on a “piece-rate basis” must be “compensated for rest and recovery periods and other nonproductive time separate from any piece-rate compensation,” and that this other time must be compensated “at an hourly rate that is no less than the applicable minimum wage.” Cal. Lab. Code § 226.2(a)(1), (4).

Section 226.2 also clarified that employers who compensate on a piece-rate basis must provide employees with an itemized wage statement containing details about total hours of nonproductive time, the rate of compensation, and the gross wages paid for that time during the pay period. Cal. Lab. Code § 226.2(a)(2)(B).

“Safe harbor” provision. Section 226.2 also carved out an exception—what the parties call the “‘safe harbor’ provision”—for hybrid compensation plans. Under § 226.2(a)(7), “[a]n employer who, in addition to paying any piece-rate compensation, pays an hourly rate of at least the applicable minimum wage for all hours worked, shall be deemed in compliance” with the statute’s requirement that employers who pay only on a piece-rate basis must separately compensate for nonproductive time, specifically time in which employees are at work but not performing the activities for which they receive piece-rate compensation.

Employers whose compensation plans qualify for this safe harbor are also exempt from the statute’s requirement that itemized wage statements include additional information on nonproductive time, rate of compensation, and gross wages. Cal. Lab. Code § 226.2(a)(2)(B).

Hunt’s new pay plans. In response to § 226.2, J.B. Hunt implemented new pay plans for most of its California-based drivers, including the plaintiffs, in December 2018. Under the new plan, employees received hourly pay for all hours worked from the start of the day to the end of the day, including time spent on pre-route and post-route paperwork, pre-trip and post-trip inspections, fueling, and training activities.

Then, on top of hourly pay, employees were paid an “activity-based bonus amount.” Eligible activities that would be calculated into bonus pay included miles, stops, detention, and loading and unloading. Activities such as fueling and completing paperwork were not eligible activities.

Calculation of “activity-based bonus.” Hunt’s “activity-based bonus amount” was not simply the sum of all eligible activity pay. Rather, the company calculated this amount by subtracting hourly pay from total eligible activity pay. As the employer explained, the activity-based bonus amount was calculated as follows: Total Eligible Activities – Hourly Pay = Activity-Based Bonus Amount.

If the difference between total eligible activity pay and hourly pay was negative—i.e. hourly pay was higher than total eligible activity pay—then Hunt simply paid the employee the employee’s hourly pay and no additional bonus for that pay period. In such circumstances, the formula would become the standard Hourly Pay = Total Compensation.

Putative class action. Plaintiffs, three California-based truck drivers who were employed by J.B. Hunt beginning in 2019, filed their putative class action against Hunt in July 2020 in the Superior Court of California, alleging failure to pay all wages for non-driving time in violation; failure to provide meal breaks; failure to provide rest breaks; failure to indemnify for all necessary expenditures; failure to issue accurate itemized wage statements; late pay and waiting time penalties; and unlawful and/or unfair business practices in violation of California’s Unfair Competition Law (UCL). J.B. Hunt later removed the case to federal district court.

In October 2020, Plaintiffs filed an amended complaint, adding an eighth cause of action for violation of the Private Attorneys General Act (PAGA). The parties then stipulated to the dismissal of the causes of action for failure to pay for rest breaks and meal breaks. The plaintiffs moved for class certification, and both parties filed cross-motions for summary judgment as to the remaining causes of action.

In December 2021, the district court denied class certification. Denying the plaintiffs’ motion for summary judgment in its entirety, the district court then granted summary judgment to Hunt on all causes of action except that for reimbursement under Cal. Lab. Code § 2802 and the UCL and PAGA claims predicated on that cause of action.

Trial and appeals. In January 2024, the district court conducted a jury trial on the § 2802 claims, and after three days of trial, the jury returned a verdict in favor of Hunt. And as a result, the district court also found in favor of Hunt as to the UCL and PAGA reimbursement claims.

On January 25, 2024, the district court entered a final judgment on all of plaintiffs’ claims, dismissed the action with prejudice, and stated Hunt shall recover costs.

On February 20, 2024, the plaintiffs appealed the final judgment.

Meanwhile, on February 9, 2024, Hunt submitted its application to the clerk to tax costs. The clerk declined to award roughly half of the deposition costs on grounds that those costs did not fall within the scope of the local rules. Both parties filed motions to retax costs, the district court denied both motions, and on May 6, 2024, the plaintiffs appealed this post-judgment ruling.

The Ninth Circuit later consolidated both appeals.

Qualification under safe harbor provision. Affirming, the appeals court found that Hunt’s Driver Pay Plan qualifies for the safe harbor of Cal. Lab. Code § 226.2(a)(7). Although the plaintiffs framed the Driver Pay Plan as “simply a piece-rate compensation scheme that fails to separately pay for all hours worked,” that framing “mischaracterizes the actual functioning of the Driver Pay Plan,” according to the Ninth Circuit. “Rather, the scheme initially pays for all hours worked and then adds any applicable bonus compensation on top of that hourly pay,” and nothing in Section 226.2 prohibits an employer from paying an hourly wage of at least the minimum wage and then adding bonus pay based on a formula that considers hours worked. “Indeed, all that § 226.2(a)(7) requires is that an employer ‘pays an hourly rate of at least the applicable minimum wage for all hours worked’ in addition to paying any piece-rate compensation.”

“That is exactly what happened here,” concluded the Ninth Circuit.

Not otherwise liable. Nor did the plaintiffs show a genuine dispute of material fact as to whether Hunt was otherwise liable for failing to pay the plaintiffs for off-the-clock work that allegedly occurred pre- or post-shift. The plaintiffs conceded below that they failed to raise a genuine dispute of material fact as to whether Hunt knew or should have known that they were performing such off-the-clock work, and even if they had not, the appeals court found, their “bare-bones testimony and speculative assertions do not demonstrate a genuine issue of material fact as to whether J.B. Hunt knew or should have known that Plaintiffs were not following its clear instructions” otherwise. They also “provided no evidence that supervisors at J.B. Hunt monitored their hours.”

Itemized wage statements. The district court also did not err by granting summary judgment in favor of Hunt on the plaintiffs’ itemized wage statement claims. Here, although they raised a genuine dispute of material fact as to whether their wage statements were inaccurate to the extent that the statements did not accurately state their total hours worked, the plaintiffs could not show that any wage statement violations as to total hours worked were “knowing and intentional.”

Expense reimbursement claims. Turning to the trial portion of the case, the appeals court found that the district court did not err by entering judgment in favor of Hunt on the plaintiffs’ business expense reimbursement claims following trial. Here, the district court did not improperly limit evidence, testimony, and argument to the plaintiffs’ individual claims. Nor did the district court abuse its discretion by excluding evidence that Hunt changed its reimbursement policy, or by failing to provide adequate jury instructions.

Costs. Finally, the district court did not abuse its discretion by awarding Hunt costs of $14,381.08 following its denial of the parties’ cross-motions to retax. The plaintiffs argued that the district court should have excluded the costs of all the depositions taken in the case because none of the depositions were used at trial, but documents do not need to be offered as evidence for them to be “necessarily obtained for use in the case” within the meaning of 28 U.S.C. § 1920, and the district court explained that all the depositions were reasonably necessary for trial preparation, given that all the individuals deposed testified at trial and several were cross-examined about their testimony for impeachment purposes.

The case is Nos. 24-933 and 24-2970.

Judge: Smith, M.

Attorneys: Ashley Boulton (Greenberg Traurig) for Willie Williams, Ladon Cline, and Paul Contreras. James Harold Hanson (Scopelitis, Garvin, Light, Hanson & Feary) for J.B. Hunt Transport, Inc.

Companies: J.B. Hunt Transport, Inc.

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