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Piece-rate compensation faqs

Frequently Asked Questions About Piece-Rate Compensation

Posted on June 12, 2017 in Employment Law

Piece-rate or piecework refers to a working and payment model whereby a worker is paid a set rate per item that they produce or per task that they perform, rather than receiving a flat rate salary or per-hour rate for their attendance. While a more common form of payment is either a fixed salary or per-hour rate for attendance rather than performance, piece-rate is becoming increasingly popular among San Diego businesses.

Due to the unique nature of the piece-rate working model, many piece-rate workers aren’t able to find reliable information online that pertains to their specific employment situation. Additionally, piece-rate workers are more susceptible to unpaid wages and as a result, have a higher likelihood of filing an employment law related claim against their employer.

Below we will answer some of the most commonly asked questions about piece-rate compensation to help guide those in need:

What sort of jobs are typically paid at piece-rate?

The piece-rate compensation model tends to be applied to specific types of tasks and working roles, such as factory workers that are paid per unit constructed, or in the construction industry where workers such as brick layers are paid by the number of bricks stacked. Other roles that typically follow piece-rate compensation are hair stylists, make up professionals, massage therapists, and auto mechanics.

Do the standard employment protection laws apply to piece-rate workers?

While the wider remit of both federal and local employment laws in the USA tend to be slanted towards the conditions of salaried or hourly paid employees rather than those working under a piece-rate model, provision is made in section 226.2 of the California Labor Code.

Section 226.2 outlines the core compensation and working conditions that all piece-rate employees are entitled to regarding both payment, rest periods, and what happens when no piece-rate work is available.

This section of the Labor Code formalizes in law the position of piece-rate workers when it comes to rights such as being paid at least minimum wage, receiving the appropriate work breaks and recuperation breaks, and what occurs if no work is available at certain times.

Ultimately, Section 226.2 of the Labor Code establishes an affirmative defense for a piece-rate worker to claim or seek compensation under a statutory penalty scheme if the employer in question fails in their core duties to their employee.
These core duties include the requirement to pay minimum wage under the piece-rate system, not to withhold wages due to a lack of available piece-rate tasks at any given time, and to make provision for adequate rest breaks and recovery periods for piece-rate workers.

Does the law apply to commission-based workers?

While commission-based roles and piece work undoubtedly share some surface commonalities, the law as it applies to piece-rate workers is not the same as that used for commission-based workers. For the purposes of labor laws, commission wages are classed as “compensation paid to any person for services rendered in the sale of such employer’s property or services and based proportionately upon the amount or value thereof” and are covered by section 204.1 of the Labor Code.

In contrast, piece-rate workers are defined in law as “employees who are compensated on a piece-rate basis for any work performed during a pay period” under section 226.2 of the Labor Code.

Are piece-rate workers entitled to overtime pay?

Just as is the case with other types of employment models, piece-rate workers are entitled to receive overtime pay if they work more than the standard 40 hours in any given week. In order to calculate the appropriate rate for overtime payments made to piece-rate workers, it falls to the employer to calculate the worker’s average hourly rate (including overtime hours worked) and then multiply the hours worked in overtime by half a percent of the base rate paid for the first 40 hours to reach the correct figure.

What rest and recovery periods are piece-rate workers entitled to?

In San Diego, employers have a responsibility not only to ensure that all of their workers are paid (at least) minimum wage, but also that piece-rate workers will continue to receive minimum wage during any downtime or other periods when piece-rate work is not available for the worker to complete. Like other types of workers, piece-rate workers are also entitled to standard rest breaks within the course of their working day, as well as appropriate gaps for recuperation between shifts.

What can a piece-rate worker do if their employer does not comply with the Labor Code?

If you are a piece-rate worker and your employer is not fulfilling the law pertaining to your right to minimum earnings, overtime payments, rest and recuperation breaks or remuneration during down times-or if you are wrongly classed as a piece-rate worker-you are entitled to seek restitution in law.

Contact Walker Law Today

If you are a piece-rate worker and you have any concerns or need to make a claim against your employer, contact Walker Law now for a free 15 minute consultation today.

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