In an ongoing battle in the courts to define whether or not a compensation system for agricultural workers is a piece-rate system or an hourly plus bonus system, the California Supreme Court today has now been called on to review the previous decision of the Court of Appeal which had been favorable to employers. See the Petition for Review. As we previously reported here, the facts of this case are based on agricultural workers, who argued their employer did not properly compensate them separately for their earnings during rest periods and other non-productive time on days when it paid an hourly base plus a bonus. The employer called this hourly plus bonus compensation a “Group Production Incentive Bonus” (GPI). On appeal, the workers argued that the GPI was actually a piece-rate wage, and the employer must have separate payments paid and identified on their paystubs for rest periods and other non-productive times to the workers. The trial court and the Court of Appeal both agreed with the employer. Now, we wait and see what the California Supremes will have to say. This decision will have huge implications for the industry, as employers well know, wage and hour violations stack on top of each other and lead to other “derivative” claims like inaccurate wage statements, recordkeeping violations, etcetera.
Counsel to Management: The California Supreme Court is notorious for issuing decisions that are favorable to employees. That being said, whenever an employer has a compensation system that pays workers more than one rate or type of compensation, such as pay based on production, compliance with the California law is a minefield and best practices should be discussed with your labor and employment counsel.
By: The Saqui Law Group