Piece Rate Work

Piece Rate Deadline Fast Approaching

Last year California passed AB 1513 requiring new information on pay stubs for piece rate workers. The new law requires employers to include rest and recovery periods and non-productive time on the employee pay stubs.

Piece Rate Compensation

Piece rate workers get paid based on the number of items they produce. In law school, we always talked about people making widgets–whatever the heck a “widget is–when we discussed piece rate workers. You find piece rate work in a variety of situations. For example, car dealerships oftentimes pay mechanics based on the number and types of jobs performed. That’s why a brake job costs the same amount regardless of whether it takes an hour or three hours. Some plumbers get paid by the job, rather than by the hour. Hair stylists oftentimes receive payment based on the number of hair cuts.

These workers are not paid hourly. Although sometimes an employer refers to the piece rate as a “commission,” it’s not really a commission. Some dispute whether a commission can only be for the sale of goods or services.

Employees paid solely on the number of items they produce get paid nothing for required rest breaks. California law mandates 10-minute “paid” rest break for every four-hours worked. A piece rate does not compensate employees for the “paid” rest break. It also does not cover non-productive times, such as waiting for customers, attending mandatory training, etc. The employee must still get paid for that time.

Affirmative Defense for Piece Rate Work

The new Labor Code Section 226.2 creates a temporary affirmative defense against unpaid wages and various penalties for employers that previously did not track and pay for rest and recovery periods and non-productive time for piece rate workers. In order to qualify for the affirmative defense, employers needed to notify the Labor Commissioner of its intent to pay workers the wages owed, and actually pay the workers by December 15, 2016. Employers that do not timely pay piece rate workers cannot take advantage of the affirmative defense

My crystal ball tells me to expect a lot of lawsuits over the next couple of years regarding unpaid rest and recovery periods and non-productive time for piece rate workers. I currently represent a class of hair stylists and other piece rate workers regarding unpaid rest and recovery periods. I advised my employer clients to move away from piece rate work, and shift to hourly wages possibly with a bonus system based on productivity.

If you have questions about your pay or how you pay your employees, contact a knowledgeable employment attorney as soon as practical.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

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