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Washington Updates Pay Policies for Agricultural Piece-Rate Workers

May 22, 2020, 5:00 PM

Compensation and recordkeeping requirements for Washington piece-rate agricultural workers’ were updated to reflect recent Washington Supreme Court guidance, the state said May 18.

Three administrative policies were revised based on the high court’s ruling in Carranza v. Dovex Fruit Co., which resolved issues that affect agricultural workers’ piece-rate minimum hourly wages (ES.A.3), meal and rest periods (ES.C.6.2), and recordkeeping requirements (ES.D.2), the Department of Labor and Industries said in a May 18 news release.

In its ruling, the state supreme court confirmed that the Washington minimum wage law requires employers to pay agricultural piece-rate employees a separate hourly rate. The separate rate must be the greater of the applicable hourly minimum wage or the agreed-upon rate for time spent performing nonpiece-rate work, the department’s ES.A.3 administrative guidance said.

Separate Compensation, Calculations

Agricultural piece-rate workers must be compensated separately for rest periods, with the payment based on the greater of the workers’ regular pay rate or the minimum hourly wage, the ES.C.6.2. guidance said, noting that piece-rate earnings cannot be counted toward the required rest-period compensation.

Rest periods for employees who alternate between piece-rate and hourly pay rates must be paid according to the rate that was in effect during the rest period, the guidance said.

To calculate the piece-rate agricultural employee’s regular pay rate, the total compensation earned in a workweek is divided by the total hours worked, excluding the break time.

If the regular pay rate exceeds the hourly minimum wage, which is $13.50 in 2020, the rest-period time is multiplied by the regular hourly pay rate, with the result added to the amount owed for piece-rate wages.

If the regular pay rate does not exceed the minimum wage, then all hours worked, including rest periods, are to be multiplied by the minimum wage. The result is the weekly compensation that is owed. The piece-rate compensation must be brought up to this amount to ensure that all hours, including rest periods, are paid at the minimum wage, the guidance said.

Employers and employees can agree to a separate rest-period pay rate other than the piece-rate employee’s regular pay rate, but it must be at least equal to the regular pay rate to ensure that rest periods are “on the employer’s time,” the guidance said.

Nondiscretionary bonuses must be included in piece-rate employees’ regular pay rate, it said.

Recordkeeping

Employers must keep records of all applicable pay rates, including the piece-rate active time or productive time, which is the time and associated pay rate for when piece-rate work is performed, and “piece-rate down time” or “nonproductive time” which is the time and associated pay rate for when duties are performed outside of the piece-rate work, the guidance said.

Paid rest periods also must be recorded, the guidance said. “To help ensure compliance with rest period requirements, a best practice for employers is to document when employees receive their rest periods,” it said.

Pay statements also must reflect all pay rates and rest periods, the guidance said, noting that it is advisable to document the time workers spent performing work at each pay rate.

Separate pay statements are unnecessary if all the required information appears on the paycheck and employees have access to a copy machine to make a copy of their paycheck, it said.

Pay statements must identify the employee, show the number of hours worked or the number of days worked based on an eight-hour day, show the number of piecework units earned, if paid on a piecework basis, show the applicable rates of pay, including piece-rate active time, piece-rate down time, hourly rates, and rest periods, the purpose of each deduction, the employer’s name, address, and telephone number.

To contact the reporter on this story: Christine Pulfrey in Washington at cpulfrey@bloombergtax.com

To contact the editor responsible for this story: Michael Trimarchi at mtrimarchi@bloombergtax.com

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