Piece-Rate Compensation

In 2013, the California Court of Appeals made a final ruling that employees who are paid on a piece rate must be compensated for their break times and all other non-productive work time (NPWT), including heat illness recovery periods, mandatory daily exercises, travel, safety training, delayed entry to the field, and other mandatory workplace training.

The California Labor Commissioner has taken the position that rest periods and cool down recovery periods must be compensated based upon the average piece-rate hourly earnings calculated on a weekly basis. All other NPWT will be subject to either the applicable minimum wage or the general hourly rate.

It is recommended that employers document and pay for all non-productive time separate from piece-rate production earnings and ensure that this payment is separately itemized on the employee’s paycheck stub pursuant to Labor Code Section 226. You should consult with your legal advisor whether to pay either the base hourly rate or the average hourly piece rate earnings for the week for all rest periods and any Heat Illness Recovery Periods requested by employees.

Reminder:  A 10-minute rest break is earned for every four hours worked of major fraction thereof.

Overtime Hours and New Minimum Wage Rate Chart

Paid Sick Leave

California’s Healthy Workplaces, Healthy Families Act of 2014 requires employers to provide paid sick leave for employees who meet minimum requirements. The following provisions went into effect on July 13, 2014 after Governor Brown signed legislation which made significant changes to the 2014 law.

Qualification – An employee in California who has been employed by a same employer for 30 or more days within a year of when employment began is qualified for paid sick leave pay.

Accrual Basis – Paid sick leave can now be accrued on any period basis so long as it is on a regular basis and will result in at least 24 hours (3 days) of sick leave by the 120th calendar day of employment. For example, paid sick leave can be accrued per pay period or other regularly occurring period of time (weekly, bi-weekly, etc.)

Use of Sick Leave – Employers may limit the use of sick leave to 3 days or 24 hours in each year of employment, calendar year, or 12-month period.

Payment of Sick Leave – Paid sick leave can be paid in one of two ways for non-exempt employees:

  • Based on regular rate of pay during the workweek in which the employee uses paid sick time whether or not the employee actually works overtime in that workweek.
  • Calculated by dividing the employee’s total wages, not including overtime, by the total number of hours worked in the full pay periods of the prior 90 days of employment.

For exempt employees, paid sick time is calculated in the same manner as the employer calculates wages for other forms of paid leave time.