Are Piece-Rate Workers Entitled to Extra Pay for Rest Breaks?

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By Westley Thompson

“We work all day in the hot sun and get breaks, but we aren't paid for them,” said Tom, a seasonal worker at a berry farm.

“Rest breaks are important for worker safety, which is why we take the rest periods into account in deciding the piece-rate we pay,” said Ken, a company manager. “There is no need for extra compensation.”

FACTS: An employer operated a berry farm and hires seasonal and migrant workers to harvest its crop by hand each year. The workers were paid a piece-rate wage, such as an amount per pound or boxful of fruit. The piece rate was the workers only compensation.

Two employees dissatisfied with the lack of compensation for rest breaks filed a lawsuit on behalf of co-workers against the employer, seeking back pay and compensation for rest periods. The employees claimed the employer violated the state minimum wage law and the federal Migrant and Seasonal Agricultural Worker Protection Act.

The workers received no pay other than a piece rate for the fruit they harvested, the complaint said. The employer said the piece rate was set high enough to compensate workers for the time they spent working and the time they spent on breaks.

A district court gave preliminary approval to an $850,000 settlement that provided back pay to about 1,200 workers, but the issue of whether the employer must pay piece-rate workers separately for rest breaks was unresolved. At the employees' request, the case was sent to the state supreme court to resolve the dispute over compensation for rest breaks.

ISSUE: Were the piece-rate employees entitled to extra compensation for rest breaks?

DECISION: The employees were entitled to compensation for rest breaks in addition to piece-rate pay, the Washington supreme court ruled.

The workers were to be compensated for the rest breaks at the minimum wage rate or the employee's regular rate, whichever was greater, the court said.

Under state labor regulations, “every employee shall be allowed a rest period of at least 10 minutes, on the employer's time, in each four-hour period of employment.”

The employer and employees agreed that rest breaks were critical to the health and effectiveness of employees, but how compensation was paid was in dispute.

A group of farmworkers sought compensation for rest breaks in addition to piece-rate wages.

Under state labor laws, employees were to be paid during rest breaks, the court said. Because piece-rate pay only accrues while employees are working, separate compensation must be provided during breaks.

Three previous cases guided the court's analysis of the labor regulation as they relate to rest breaks. The regulation had been used previously to determine the role of rest breaks in various workplaces.

In those cases, courts did not establish blanket rules but looked at the purpose rest breaks served and how they were used by the employees in the workplace.

In agriculture, employees face risks of injury from repetitive motions and environmental hazards, the Washington high court said. Breaks provide an opportunity for employees to rest and reduce the chance they may be hurt, the court said.

The Washington rest-period regulation is silent on the rate of pay, but the court said that “the starting point for the calculation is the applicable minimum wage.”

Compensation for break periods could not be made at a rate lower than the state minimum wage. If breaks were paid at a lower wage than the pieceworker's regular rate, “there is a strong incentive to miss rest breaks,” the court said.

The court decided the starting point would be the state's minimum wage because the minimum wage act “sets the floor below which the agreed rate cannot fall.” If a piece-rate worker's pay falls below the minimum wage rate, the employer is to pay the employee the difference necessary to bring compensation up to the minimum wage rate.

All hours worked on an employer's time are to be treated equally, which entitles piece-rate employees to their regular pay during rest breaks, the court said (Demetrio v. Sakuma Bros. Farms Inc., 2015 BL 227300, Wash., No. 90932-6, 7/16/15).

POINTERS: An employee's regular rate is an hourly rate. When an employee is compensated solely by an hourly wage, the employee's regular rate is the same as the hourly wage. However, when an employee is paid on a piece-rate, salary, commission or other-than-hourly basis, the employee's payments must be converted to an hourly regular rate.

Labor laws vary by state and there may not be clarity on how to handle breaks and other special rules, especially for workers with unusual schedules or those who are paid based on a variety of factors, such as a piece-rate policy.

Piece-rate employees are paid based on the number of units they produce, which may cause confusion when determining how to apply compensation for rest breaks, meal periods, leave time and other situations.

A general method for calculating a piece-rate worker's regular rate is to average the worker's total earnings over the hours worked in a particular workweek.

For more information, see PAG's “Regular Rate Determination” chapter.

This analysis illustrates how courts resolve pay-related disputes. The names and dialogue are fictitious.