Right now I work for a contractor and he claims that he does not have to pay us until we get to the job site, yet we have to meet at his shop in the morning. For example he'll say you need to be at my shop by 7:30am he splits everyone in to teams and sends them to different jobs. whatever team leader drives us to the jobs get paid from 7:30 on while the rest of us don't start getting paid until we get to the job site which can somtimes be more than an hour away. Is this legal? or should he be paying us from the time we show up?

If you report and then travel to other locations you a supposed to be paid for it, however it can be at a lower rate not less than minimum wage.
My understanding.

Joe916 is correct. The lower rate can be paid as long as you receive prior notice. You can file a claim with the Division of Labor Standards Enforcement for unpaid wages.

While you can be paid any rate set in advance of the work that is greater than minium wage for any travel time that occurs in non-overtime hours, you must be paid at 1.5x your "regular rate of pay" for all travel hours that are overtime hours. The "regular rate of pay" is your average rate of pay for the pay period. Thus, the amount you are paid for the return trip at the end would need to be 1.5x the weighted average of the $6.75 in the morning and the rate you worked at all day.

One of my customers has this same arrangement with their employees, with one small difference, the employee is given the option to drive themselves to the jobsite. The employee is responsible for calling in the afternoon to find out where they need to be in the morning. While this saves the employee having to be at the shop in the morning (and not getting paid while riding to the job)they then have to pay for their own gas to get to the jobsite as well as in between jobsites as they may be on several jobsites in a day. You may ask your employer if you can drive yourself to the jobsite. This is more difficult for the employer to schedule and does not allow them the flexibility of last minute changes, so they may see the value in paying you for the ride. Not a legal remedy but a possible solution to the problem.