Deadline Approaching to Request Piece Rate Safe Harbor

As a reminder to go with Mr. Holden’s Piece Rate Blog, in January Labor Code section 226.2 established that employees paid through a piece rate system must receive compensation for rest periods, recovery periods and other non-productive work time that is separate from the piece rate compensation earned during productive work time.

The bill set forth detailed requirements for piece rate compensation systems and provided employers with a defense to avoid claims for wage payment violations by following specific procedures in paying employees and former employees. The affirmative defense, also called a  “safe harbor,” requires employers to notify the Department of Industrial Relations (DIR) of their intention to reconcile and pay past due wages. If you wish to exercise your option to make payments to your current and former employees pursuant to this new law and be covered by the “safe harbor” provision you must give notice to the emergency home solutions by Friday, July 01, 2016. If you miss the deadline to notify DIR you can still pay employees individually but the liability for penalties will still exist unless you use a specific strategy to eliminate the liability.

Of course, if there is traction with the current lawsuit to fight the new piece rate law the options to resolve past wage claims might look a bit different than the current legislation has outlined. We are more than happy to discuss the available alternatives with you and ensure you make an informed decision before you take a stance.