Under California law, there are various rules that apply to employers paying employees on a piece rate basis. Piece rate compensation refers to when an employer pays its employees based on how many tasks completed or widgets manufactured rather than simply on an hourly basis. Typical examples are taxi cab drivers paid by the ride or a factory worker paid by the widget manufactured.

Piece rate employees must be paid for unproductive time that is not spent performing tasks that the piece rate or commission scheme is specifically designed to compensate. In other words, if you are an employee paid on a piece rate basis but are not paid for non-productive down time (like clerical work, administrative tasks or meetings), then you may be owed additional compensation. An employer cannot argue that time spent performing nondriving tasks are compensated by a piece-rate pay plan when the piece rate is based on driving activities such as the number of miles driven. (Quezada v Con-Way Freight, Inc. (ND Cal, July 11, 2012, No. C 09–03670 JW) 2012 US Dist Lexis 98639; Cardenas v. McLane Foodservices, Inc. (CD Cal 2011) 796 F Supp 2d 1246 [“Even if communicated to its employees that this piece-rate formula was intended to compensate for pre- and post-shift duties, the fact that it did not separately compensate for those duties violates California law.”]; Bluford v Safeway Inc. (2013) 216 CA4th 864 [employer’s compensation system did not comply with California law because it did not separately compensate drivers for rest periods].) Each duty covered by piece rate pay must be separately compensated. (Id.)

Similarly, if you are a piece rate employee, you must receive compensation for rest breaks and heat recovery periods. The additional compensation is calculated as as the greater of the average hourly rate for the week (calculated as the total compensation for a week, exclusive of rest and recovery period compensation and overtime premiums, divided by the total hours worked in the week, exclusive of rest and recovery periods) or the minimum wage. (Labor Code § 226.2(a)(3).)

Additionally, if you are a piece rate employee, your wage statements must indicate how your pay was calculated under the piece rate scheme. In other words, the wage statements must detail the total hours of compensable rest breaks/recovery periods/other nonproductive time, the amount of piece rate items completed, the rate of compensation, and the gross wages paid for those periods during the pay period, among other items.

If you are piece rate employee, you should consult with an knowledgeable wage and hour employment attorney to determine if you are owed compensation.