Feb 5, 2016 / by Darlene Savala, CPA , Gilbert, Inc.
Just when everyone thought they had finally cleared all the hurdles of the Sick Leave law, California’s piece-rate employers have been given a new requirement. Effective January 1, 2016, Assembly Bill 1513 sets forth requirements for pieceworkers to be compensated for rest and recovery periods and “other nonproductive time”. AB1513 defines “other nonproductive time” as “time under the employers control, exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis.” This would include things like mandatory safety meetings, travel time, etc. [i]
The law also requires that employees are given a detailed worksheet that shows how these wages are calculated and paid and attached to their paystub. AB1513 is also requiring that employers compensate employees for rest and recovery periods in arrears starting in July of 2012.
In order to be compliant, California’s piece-rate employers need to comply with the following:
- Compensate employees for rest and recovery periods starting January 1, 2016 an hourly rate that is either the applicable minimum wage, or their regular hourly rate, whichever is higher
- Compensate employees for all “other nonproductive time” at an hourly rate that is not less than the applicable minimum wage
- Provide each employee with a detailed statement showing the calculation each pay period which includes the total hours of paid rest and recovery time, rate of compensation for that time and gross wages associated
In addition, employers can adhere to the requirements of Labor Code section 226.2 which will provide a limited safe harbor for employers. In order to obtain this limited safe harbor, you must have not been sued for any damages associated with rest and recovery periods or “other nonproductive time” for any periods prior to March 1, 2014. [ii] In addition, employers:
- Must come into compliance with the requirements of AB1513
- Must pay actual or liquidated damages by December 15, 2016
- Pay all piece-rate employees for rest and recovery periods and “other nonproductive time” starting July 1, 2012 through December 31, 2015. There are two methods to calculate this amount:
- Actual Amount: Calculated for actual amount due plus interest in accordance with Labor Code section 98.1 (c); or
- Percentage of Earnings: Employer to pay 4% of the employee’s gross earnings for each pay period during the applicable time frame where any piece-rate wages were paid. If any non-piecework wages were paid during that time frame, they are deductible, but may not exceed 1% of the employee’s gross earnings during the period.
- Provide written notice to the Department of Industrial Relations that that it elects to pay its current and former employees in accordance with the statutory requirements
- Need to have all payments made on or before December 16, 2106
Should you have any questions on becoming compliant, we recommend that you consult your attorney for detailed advice unique to your situation.
[i] Piece-Rate Legislation (AB 1513) Fact Sheet. (2015, December). Retrieved February 05, 2016, from https://www.dir.ca.gov/pieceratebackpayelection/AB_1513_FACT_SHEET.htm
[ii] Frequently Asked Questions. (2015, December). Retrieved February 05, 2016, from https://www.dir.ca.gov/pieceratebackpayelection/AB_1513_FAQs.htm