Sunday, November 15, 2015
Piece-Rate Compensation - AB 1513 and its impact on contractors
On October 10, 2015 Governor Brown signed AB1513 into law. The modifications to employment law that AB1513 made deal with workers’ compensation and piece-rate compensation. This post addresses the latter.
A few industry associations asked a law firm to provide an opinion of the new law as it relates to piece-rate compensation. The law firm did an excellent job addressing the various points of the new law. You can view their memorandum here. Their memorandum outlines the “safe harbor” provisions contractors will need to comply with, by December 15, 2016, in order to avoid fines and penalties. The changes required by the new law may prove costly for contractors whom have historically compensated their workers on a piece-rate basis. At a minimum, changes to how these contractors compensate their employees in California appear to be on the way.
A significant element of the changes have to do with contractors being required to pay workers for rest and recovery periods and other non-productive time. The administrative requirements being imposed by this new law all but assure the demise of piece-rate pay, at least as it has been known historically. If you have been compensating workers on a piece-rate basis and you want your voice to be heard regarding these changes, I suggest either connecting with an industry association (as referenced in the memo linked above) or contacting your local state representative directly. In the meantime, you need to become aware of the issues and requirements surrounding the new law and act accordingly.