Piece rate: What are the compensation requirements for other nonproductive time?
Labor Code section 226.2, subdivision (a)(1) and (a)(4) provide that:
- Employees must be compensated for other nonproductive time separate from any piece-rate compensation, and
- Employees must be compensated for other nonproductive time “at an hourly rate that is no less than the applicable minimum wage.
This means that piece-rate employees must be paid compensation for “other nonproductive time” that is separate from their piece-rate compensation. An employer may not treat the piece-rate compensation as including compensation for other nonproductive time, no matter how the piece-rate was determined.
The compensation requirement for other nonproductive time is simply that it be paid at an hourly rate of no less than the applicable minimum wage.
The statute also contains a kind of “safe harbor” provision in subdivision (a)(7), which states:
An employer, who in addition to paying any piece-rate compensation pays an hourly rate of at least the applicable minimum wage for all hours worked, shall be deemed in compliance with paragraph (4).
This means that if an employer pays a base hourly rate of at least the applicable minimum wage for all hours an employee works, in addition to any piece-rate compensation, the employer will be deemed in compliance with the compensation requirements for other nonproductive time.
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