Piece Rate Pay Workers Get New Compensation Under Calif. Law

This year, California workers who earn piece rate pay are enjoying new legal protections that guarantee they’ll earn at least the minimum wage.

Starting Jan. 1, 2016, California workers who get paid on a piece rate basis are entitled to at least the minimum wage for all time they spend on work-related tasks.

Work time included in this calculation includes time spent on ancillary tasks that may not be specifically included in the piece rate pay.

This law benefits many different types of employees who get paid not with a salary or by the hour, but by the piece instead.

It’s easy to think of a manufacturing worker being paid a designated rate for each item produced. Other kinds of workers compensated by the piece can include truckers, pet groomers, repair technicians and mechanics, construction and maintenance workers, and personal trainers.

The law comes with other new protections for workers earning piece rate pay, such as paid break time. These workers can now expect separate compensation for rest and recovery periods.

Determining the rate of pay for these breaks is a little complicated. It’s supposed to be no less than the higher of the applicable minimum wage or the worker’s total compensation for the workweek divided by the number of hours worked.

Time on the job that is deemed “other non productive time” must also be paid, but only at the applicable minimum wage rate.

New California Requirements for Documenting Piece Rate Pay

With these new compensation requirements comes a duty for the employer to provide the employee with itemized statements that document the separate hours and rates of pay.

These statements must separately show the employee’s rates of compensation, the total amount of time for compensable rest and recovery periods, the total time for other nonproductive time, and the gross wages paid for those break periods during that particular pay period.

Failure by an employer to provide accurate and timely compensation statements may give rise to a claim under California employment law.

Governor Jerry Brown signed the new protection into law in October 2015, amending Section 226.2 of the California Labor Code.

While the law went into effect at the beginning of 2016, it gave employers until April 30, 2016 to reprogram or upgrade their payroll systems into compliance.

In the interim, employees were required to pay their piece rate employees for all break periods at or above the minimum wage, and to pay any difference between the amounts paid and the amounts owed under the average hourly rate calculation, plus interest, by April 30.

The law also gives employers a legal defense to claims that arise out of failure to pay the new rates for work periods prior to and including Dec. 31, 2015.

The employer must meet satisfy a long list of requirements before they can take advantage of that defense, however.

Similar Protections for California Commissioned Salespersons

These new protections join other, similar protections enjoyed by California inside salespersons who are paid by commission. These workers may be entitled to hourly pay for nonproductive time during which they remain under their employers’ control – for example, requiring the employee to remain on site during time in which no sales can be made.

Join a Free California Sales & Piece Rate Worker Class Action Lawsuit Investigation

If you are a California employee who receives commission pay or gets paid on a piece-rate basis, but you have been denied additional minimum wage pay, your employment rights may have been violated.

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