Piece Rate Compensation In California

Assembly Bill 1513 created California Labor Code Section 226.2, which requires employers to pay employees who are compensated on a piece-rate basis for rest and recovery periods and “other nonproductive time” separately from any piece-rate compensation. Employers are required to compensate employees for rest and recovery periods and “other nonproductive time” according to the following:

  • Rest and Recovery Periods: No less than the higher of minimum wage or an average hourly rate, which is determined by dividing the total compensation for the workweek (not taking into consideration compensation for rest and recovery periods or any premium compensation for overtime) by the total hours worked during the workweek (not including rest and recovery periods).
  • Other Nonproductive Time (defined as time under the employer's control, exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis): No less than the minimum wage. However, an employer who pays an hourly rate of at least the applicable minimum wage for all hours worked, in addition to any piece-rate compensation, will be considered compliant with Section 226.2.

In addition to the nine wage statement requirements set forth in Labor Code section 226(a), the law requires that wage statements issued to piece-rate employees separately list the total hours of compensable rest and recovery periods, the rate of compensation, and the gross wages paid for rest and recovery periods during the pay period.  The wage statement must also separately list the total hours of other non-productive time, the rate of compensation, and the gross wages paid for the other non-productive time during the pay period.