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Quick Summary
CALIFORNIA PIECE RATE WORKERS -
OVERTIME AND MINIMUM WAGE REQUIREMENTS
An employer can pay their employees on a piece rate basis. This means that the employee is not paid a salary or per time worked, but is paid a set amount for each project that is completed. A common example is auto mechanics that are paid a set amount for a type of repair, regardless of how long it takes them to actually perform the repair. Some employers mistakenly believe that piece rate workers are not exempt from the overtime and minimum wage requirements. Those wage rules, however do apply, and piece rate workers must be appropriately paid.
Law Review
Minimum Wage Requirements
A minimum wage must be paid for all hours worked during a payroll period. Thus, if work is slow and there are few, if any, piece rate jobs to perform, at a minimum auto mechanics are entitled to be paid a minimum wage for all hours worked.
Redoing Piece Work Wage Requirements
A mechanic can be required to redo their work without being paid a second flat rate for the job. However, the time spent redoing the work is calculated in determining the minimum wage threshold.
Overtime Wage Requirements
Auto mechanics are entitled to be paid overtime, even though their regular rate of pay is a flat rate for each assigned job. (Keyes Motors, Inc. v. DLSE (1987) 197 Cal.App.3d 557.) The total flat wage earned during the pay period is calculated. This amount is divided by the total number of hours worked during the pay period, including any overtime. This is the employee's regular rate of pay for the work period. Since the overtime wage is time and one-half, half the regular rate of pay times the number of overtime hours equals the owed overtime pay.
More Information is Available with a Premium Subscription
Example of how the minimum wage works with a piece-rate workweek and how to do the calculations
Example application of minimum wage when work is redone and how to do the calculations
Examples of how the overtime rules work with minimum wage and piece-rate work and how to do the calculations
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