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RSHC Attorney Ashley Paynter Publishes in Law360 on California’s Piece-Rate Compensation Regulations

In “How to Create a California-Compliant Piece-Rate Compensation Policy,” published in Law360, RSHC Attorney Ashley Paynter advises California employers on drafting compensation policies that involve a piece rate.

A well-crafted piece-rate compensation policy can align the employee’s incentives with the employer’s desire for efficiency and productivity. But California has special rules for employers who use piece-rate pay that have made compliance more challenging. By examining Ayala v. U.S. Xpress Enterprises, Inc., a 2021 case decided by the U.S. Court of Appeals for the Ninth Circuit, Ashley shows that employers and employees are still free to determine the scope of their piece-rate plan by agreement.

With careful drafting and clear communication, California employers who utilize piece-rate compensation can create policies that meet the state’s requirements that all short rest breaks are paid separately at the employee’s regular rate, and that any work not covered by the piece-rate plan is paid separately at least the applicable minimum wage — including any time that the employee is under the employer’s control regardless of whether the employee is actively engaged in work tasks. 

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