How A.B. 1513 Regarding Piece Rate Compensation Plans May Affect Your Potential Claims

Written by Galen T. Shimoda and Justin P. Rodriguez

The hot topic in wage and hour litigation and class action has been piece rate compensation systems for some time. With the complexities of wage and hour law, any unique system of compensation brings with it many potential pitfalls leading to liability for employers. The explosion of piece rate based wage and hour lawsuits, including class actions has come to the point where the legislature took notice. In 2015, the legislature passed, and Governor Brown signed into law, A.B. 1513, which addresses some of the fundamental aspects of litigation over the validity of piece rate compensation systems.

The hot topic in wage and hour litigation and class action has been piece rate compensation systems for some time. With the complexities of wage and hour law, any unique system of compensation brings with it many potential pitfalls leading to liability for employers. The explosion of piece rate based wage and hour lawsuits, including class actions has come to the point where the legislature took notice. In 2015, the legislature passed, and Governor Brown signed into law, A.B. 1513, which addresses some of the fundamental aspects of litigation over the validity of piece rate compensation systems.

It is clear that this provision is a reaction to the recent wave of litigation. Further provisions give some employers extended time, to April 30, 2016, to correct their payroll processes and wage statements to comply with the new requirements. Additionally, reasonable estimates may be made to determine the amount of non-productive downtime that exists. Many employers have based piece rate compensation systems on time audits related to specific tasks and gaps between the tasks. The legislation appears to give employers a defense to claims where they have taken the time to formally audit their practices to arrive at reasonable estimates of non-productive time to be paid. A.B. 1513 also provides essentially a cure provision for any claims arising out of the failure to pay non-productive time and inaccurate wage statements related their non-payment. Although there are many hurdles to actually being able to cure a violation, employer's now have a clear path if they wish to resolve their wage and hour issues rather than face expensive, time consuming litigation.

Notwithstanding this new employer friendly litigation, if your pay under a piece rate system is still not compensating for downtime, does not compensate for actual downtime, or compensates based on unreliable, inaccurate, or outdated estimates of time, you may still have a viable claim.

If you would like to have your claims evaluated, please contact our office.

 

The Shimoda Law Corp. legal articles should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents of these articles are intended for general information purposes only, and you are urged to consult a lawyer concerning your own situation and any specific legal questions you may have.

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