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.
Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law. We cannot answer questions about specific situations or provide legal advice over the Internet. If you desire legal advice, you should contact an attorney.
Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Do not post confidential or time-sensitive information in this blog. The Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.
The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.