California Piece-Rate Law Upheld by Court of Appeal
Rejecting an argument that the use of the phrase “other nonproductive time” rendered the statute unconstitutionally vague, a California Court of Appeal recently upheld the state’s law regarding compensation of piece-rate workers. Nisei Farmers League v. California Labor & Workforce Dev. Agency, 2019 Cal. App. LEXIS 10 (Cal. Ct. App. Jan. 4, 2019). Therefore, the method of pay calculation that has been in place since 2013 remains the law.
California law, as first set forth in two groundbreaking Court of Appeal cases in 2013 and subsequently codified by the California legislature in 2016, does not allow “nonproductive” work time to be lumped together with productive time when determining whether a piece-rate employee has been paid at least minimum wage. Thus, when a piece-rate employee is engaged in nonproductive work, that time must be separately compensated at a rate at least equal to minimum wage for all hours worked. California law differs from, and is more restrictive than, federal law in this respect. Under the FLSA’s piece-rate regulations, nonproductive time does not have to be separately compensated; as long as total pay divided by total hours worked for the week equals or exceeds the federal minimum wage, the law is satisfied. 29 C.F.R. §778.111.
As defined under the 2016 California statute (Labor Code Section 226.2), nonproductive time includes rest and recovery periods and “other nonproductive time,” the latter being defined as “time under the employer’s control, exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis.” For example, the time spent waiting for the next assignment, by an auto mechanic who is paid based on each repair or maintenance job performed, would be considered “other nonproductive time.”
In Nisei, the plaintiff-appellees argued that the term “other nonproductive time” was unconstitutionally vague because the statute failed to define precisely what activities constituted such time. The Court of Appeal rejected this argument, noting that to be unconstitutionally void for vagueness, the statute must “either forbid or require the doing of an act in terms so vague that persons of common intelligence must necessarily guess as to its meaning and differ as to what is required.” Recognizing that demonstrating unconstitutional vagueness is an “exacting” standard, the Court of Appeal added that a statute will not be considered void solely because it contains some level of ambiguity. In this case, the Court of Appeal held that the definition set forth in the statute did not meet that exacting standard of vagueness, but instead “provides an adequately discernable standard that possesses a reasonable degree of specificity.”
Accordingly, California law regarding pay calculation for piece-rate workers, as it has existed for the past several years, remains binding on all employers in the State.
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