Workers who have been paid on a 'piece rate' or 'flag rate' basis.
Piece rate workers may be able to seek compensation for unpaid work hours. This may include "down time" in-between tasks, waiting time or time spent performing menial or "non-piece rate" tasks.
Piece rate workers are paid a fixed rate for each unit of production, regardless of the number of hours worked.
A California court ruled in April 2013 that the piece rate pay system for a Los Angeles auto repair shop failed to adequately compensate workers.
Piece rate workers who were not paid beyond their piece rate for “down time” on the job may be entitled to compensation. It has been alleged that certain companies are failing to properly pay their piece rate employees for time spent waiting for work and/or performing menial or “non-piece rate” tasks, such as traveling to other locations, attending meetings, cleaning work stations or participating in training.
If you are a piece rate employee and have been required to carry out cleaning, maintenance, or other tasks in-between work without additional pay, you may have legal recourse.
Illegal Pay Averaging
Piece rate wages are used in a variety of professions, including mechanics, agriculture, delivery, trucking, commissioned sales, manufacturing, and telemarketing, among others. Employees are paid for time spent on specific tasks without regard to the number of hours worked. For example, in a manufacturing plant, a worker will receive a set amount for each item he produces, regardless of the number of hours spent working on that specific item. Unfortunately, some piece rate employees are not receiving proper payment for time spent in between these jobs.
In fact, one court ruling found that "the obligation to pay minimum wages attaches to each and every separate hour worked during the payroll period."
Employers argue that they are in compliance with state wage and hour laws because they are guaranteeing their workers at least the minimum wage for each hour worked, not just time spent on piece rate tasks. Essentially, the employer will “top off” their employee’s pay if their piece rate earnings divided by the number of hours actually worked, including down time, does not meet the minimum wage requirement. This “pay averaging” scheme, however, presents two problems. First, if an employee’s piece rate earnings meet minimum wage requirements, then time spent in-between jobs are effectively unpaid, despite the fact that the worker is still performing routine tasks, such as cleaning, organizing and filing. Second, employees must be given the chance to earn the minimum wage for each separate hour worked, potentially making these pay averaging practices unlawful. In fact, one court ruling found that “the obligation to pay minimum wages attaches to each and every separate hour worked during the payroll period.”
Piece Rate Workers Class Action Lawsuit
A recent ruling by a California judge found that automobile service technicians must be compensated for each hour worked regardless of whether they were carrying out repairs or performing non-piece rate tasks, such as cleaning, attending meetings, reviewing service bulletins or traveling to pick up and return cars. The case, brought by 108 service technicians, alleged that the company’s pay averaging practice was illegal, and that they were owed a separate hourly minimum wage rate for any time spent in between repairs. In its ruling, the court found in favor of the plaintiffs and held that the company that violated California Labor Code. The California Court of Appeal affirmed the decision, noting that: “Every employer shall pay to each employee, on the established payday for the period involved, not less than the applicable minimum wage for all hours worked in the payroll period, whether the remuneration is measured by time, piece, commission, or otherwise.”
Paid on a piece rate basis? If you have not been paid for “in between” work, you may be able to seek compensation for time spent working without proper pay.