Supreme Court to address piece-rate breaks

Piece rates are a common way to pay farm workers for harvesting fruit and other tasks. A piece rate establishes in advance the labor cost for harvest. A piece rate also rewards productivity.

The faster worker gets paid more. A properly set piece rate can benefit both the employer and the worker.

Washington piece rate workers brought suit in federal court in the case of Paz v. Sakuma Bros. and argued that they weren’t allowed rest breaks and weren’t paid for rest breaks as required by law.

The federal court has asked the Washington Supreme Court to rule on several issues in that case. The Washington Supreme Court’s answers could significantly impact piece-rate compensation and may result in substantial back-pay claims for piece-rate workers.

The federal court posed the following questions to the Washington Supreme Court:

1. Does a Washington agricultural employer have an obligation under state law to separately pay piece-rate workers for the rest break to which they are entitled?

2. If the answer is yes, how must employers calculate the rate of pay for the rest-break time?

Farm workers, under Washington law, are entitled to rest and meal breaks. Farm workers receive an unpaid meal break of thirty minutes. In addition, “

[e]very employee shall be allowed a rest period of at least ten minutes, on the employer’s time, in each four-hour period of employment.” (Washington Administrative Code 296-131-020.)

Workers are allowed a paid break. In the case of an hourly worker, this presents no problem. They stop working, but remain on the clock during their rest periods.

But when a piece-rate worker stops working, arguably because they are paid based upon productivity, they are no longer being paid. Washington law does not expressly address this issue. The regulation that governs meal and rest breaks for agricultural employers (WAC 296-131-020) states that “[f]or purposes of computing the minimum wage on a piecework basis, the time allotted an employee for rest periods shall be included in the number of hours for which the minimum wage must be paid.”

Therefore, break time is included in the piece-rate calculation, but does that mean that workers are actually paid for their breaks?

Recent decisions out of California courts have held that under California’s wage laws, nonproductive time, including break times, must be compensated under a separate hourly minimum wage. Worker advocates in the Paz v. Sakuma case are advocating a similar approach in Washington.

This could have a substantial impact on the agricultural industry. Wage claims generally have a statute of limitations of three years and arguably, because this involves an interpretation of an existing law rather than the implementation of a new law, it would be retroactively applied. An additional twenty minutes a day for every worker that worked for the last three years will add up fast.

There is a great deal of uncertainty, but there are some things that an agricultural employer can do now to minimize their risks.

1. Encourage employees to take meal and rest breaks.

Provide water, shade tents, and restrooms as required by law, and encourage employees to use them. Make sure your employees know that you honor meal and rest break regulations. Train managers to permit employees to take breaks and not to penalize any worker for taking statutory breaks.

2. Get a waiver of rest breaks if appropriate.

By state law, an employee “shall receive” a meal break, but the same regulation states that an employee “shall be allowed” a rest break. Therefore, the worker arguably has a choice and may decline or waive a rest break. In practice, many workers do not want to take a rest break.

However, to counter an assertion later on that the employer wrongfully denied rest breaks, employers should inform workers of their right to rest breaks in written handbooks or policies (which should be readily available and posted in English and Spanish ) and encourage workers to report if they are being denied breaks.

Some agricultural employers have been obtaining written rest break waivers from employees who do not want to take a break. The written waiver for agricultural workers is a fairly recent phenomenon; no Washington court has decided whether these waivers are valid. However, the Department of Labor and Industries has found that non-agricultural employees may not waive rest breaks (Administrative Policy ES.C.6, § 9, at 4.)

3. Pay for breaks.

Another option is to pay for an extra twenty minutes a day. However, the second issue before the Supreme Court is: If breaks are to be separately compensated, what is the applicable rate? Is it the minimum wage?

At minimum wage, if the break can be waived, it is likely that most workers will waive the break because they can make more than minimum wage during that twenty-minute period. Or is it a calculation based upon the established piece rate per hour for each worker each week? Or is it some other method? The amount of payment required is anybody’s guess.

4. Agree that the piece-rate pay is for all work.

Under federal law, an employer and employee may agree that the pay the worker earns for productive work is intended to compensate him or her for all hours worked, both productive and nonproductive (including breaks), and in such a case, the employee’s regular rate is determined by dividing the total earnings by the total hours worked in the workweek. A signed agreement, which can be incorporated into an existing acknowledgment or a standalone document could read something like this:

I agree that I may be paid a piece rate. I understand that piece rates fluctuate throughout the crop year and harvest periods. I agree that the piece rate is intended to compensate for all hours of work performed whether productive (piece-producing) or not, including rest breaks.

Employers should also revise their Migrant and Seasonal Agricultural Worker Protection Act (MSPA) notice to include similar language.

5. Be heard.

The issues before the Supreme Court will potentially impact the entire agricultural industry in Washington. There are two ways the agricultural community can let their voices be heard. The first is to submit amicus briefs to the Washington Supreme Court (an amicus brief is an opportunity for outside parties to weigh in on a case) so that the Court is aware of how its decision might impact the agricultural industry. Initial briefs are due in January.

The second way to be heard is to contact our legislative representatives and the Department of Labor and Industries and advocate for a regulation that takes into account the realities of piece-rate compensation. •

Sarah Wixson is an attorney with Stokes Lawrence Velikanie Moore and Shore in Yakima, Washington. This article provides general information and does not constitute legal advice or opinion on specific facts.