Piece rate: What does the 4% option in Labor Code section 226.2 (b)(1)(B) apply to?

The 4% calculation applies to each and every pay period, between July 1, 2012 to December 31, 2015, in which some part of the employee’s work was compensated on a piece-rate basis (including if the piece-rate was paid on top of an hourly rate). If an employee had pay periods with no piece-rate earnings (including payroll periods in which he or she was compensated solely on an hourly basis or received only vacation pay), then those pay periods are not included in the calculation. However, all other weeks must be included in the calculation, and the 4% calculation applies to the employee’s entire gross earnings in each of those pay periods.

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