Do you employ workers on a piece-rate basis but require them to stick around when things are slow or perform other tasks between the piecework? If so, watch out!
You may think you can take the piece rate earned, tally up their total hours and divide the money earned by those hours to check whether they earned at least minimum wage. You would be wrong.
According to a recent California appellate decision, you must pay a separate minimum wage rate for all nonpiece-rate time. You can’t just rely on the higher piece rate to cover your wage obligations during downtime.
Recent case: Oscar worked as a Mercedes Benz auto technician and was paid per repair regardless of how long it took. He also had to stay at work during slow times, waiting for customers and doing paperwork. He wasn’t paid for that time.
Instead, the company added up all Oscar’s earnings and divided by the total hours worked. If the formula showed an average hourly rate of at least minimum wage, Oscar got just his piece-rate earnings. If the sum fell below minimum wage, the company added enough to make sure he made the minimum wage.
Oscar sued and won the right to be paid minimum wage for all his nonrepair time. (Gonzalez v. Downtown LA Motors, et al., No. B235292, Court of Appeal of California, 2nd Appellate District, 2013)
- How to Fire an Employee the Legal Way: 6 Termination Guidelines
- Your dollars at risk: 6 ways to protect yourself from personal liability
- Check pay rates for employees who regularly swap work
- Use greater experience, extra skills to justify why you pay some employees more than others
- Sen. Anderson 'Disappointed' over Pawlenty's wage veto