CA Law Limits Piece Rate Comp

Industries in California and countrywide have traditionally used piece-rate plans to compensate employees and incentivize productivity. Class actions claiming that such compensation violate minimum wage laws have become increasingly common. Littler attorneys Richard Tom and Angela Rafoth discuss a law signed by California Gov. Jerry Brown on Oct. 12 that that re-writes the definition and rules governing the payment of piece-rate compensation in the state. It provides a limited safe harbor for employers who have not yet been, or have only recently been, the subject of class action litigation based on a failure to pay wages in accordance with recent cases limiting piece rate compensation.