A recent California Court of Appeal decision upheld the state’s complex rules for compensating piece-rate employees. In Nisei Farmers League v. California Labor & Workforce Dev. Agency, 2019 Cal.App. LEXIS 10 (Cal.Ct.App. Jan. 4, 2019), the Court held that the Labor Code’s requirement that piece-rate employees be separately compensated for “nonproductive time” was not unconstitutionally vague. With California’s “productive vs. non-productive time” rubric firmly in place, employers must take great care to track and compensate piece-rate employees’ time, or face stiff penalties.
What Does “Piece-Rate” Mean, And Why Might An Employer Chose It?
Piece-rate compensation plans are very popular in some industries. They can incentivize employee productivity, while giving an employer greater control over labor costs. Under a piece-rate compensation system, the worker is paid a fixed amount of money for each unit produced or action performed, regardless of the number of hours worked. Industries that pay employees on a piece-rate basis include:

Occupational Safety and Health Act of 1970 to increase both civil and criminal penalties, expand coverage, and create new obligations for employers. Congress has not acted recently on the bill, named the “Protecting America’s Workers Act," but employers should expect action sometime in the new year.