Reminder: July 1 Deadline for Employers to Participate in AB 1513’s Safe Harbor from Penalties on Piece-Rate Back Payments

The Department of Industrial Relations (DIR) today reminds employers of the July 1 deadline to notify DIR of their intention to make back payments to piece-rate workers in exchange for relief from statutory penalties and other damages.

Assembly Bill 1513, authored by Assemblymember Das Williams (D-Carpinteria) and signed into law by Governor Brown in 2015, established pay requirements for piece-rate workers for mandated rest and recovery breaks and other nonproductive time. The new law also provides a short window of time for employers to make back wage payments to piece-rate workers for rest and recovery breaks and other nonproductive time in exchange for penalty relief provisions.

“I introduced this bill to clarify confusion in the statute after two landmark court cases and, with the support of employers and workers, established a fair and manageable method of payment for ‘rest breaks’ and ‘non-productive time,’” Assemblymember Williams said. “This bill provides employers who were facing costly litigation with a window of time from liability to justly compensate employees for back pay without having to pay penalties.”

Employers who make the back payments will have a legal defense to claims for damages or other penalties associated with any alleged prior failure to pay what was due for such time.

For employers that are electing to participate, the back payments are required for the time period of July 1, 2012 through December 31, 2015, and must be paid no later than December 15, 2016. Employers who elect to participate also must notify DIR of their decision by Friday, July 1, either by completing the online notification form, or by sending the notification in U.S. mail. Click here for the Piece-Rate Back Pay Election Form Listing.

“I encourage employers to take advantage of this safe harbor penalty relief by notifying the department by July 1 of their election to make back payments to affected piece-rate workers,” said Labor Commissioner Julie A. Su. The Labor Commissioner’s Office is a division of the Department of Industrial Relations.

Piece-rate compensation refers to paying an employee a specified sum for completing a particular task or making a particular item, and is generally contrasted with hourly compensation, which pays employees based on hours worked. DIR has posted additional information online on the piece-rate legislation, including detailed FAQs and a fact sheet. Answers to other questions about the new law can be obtained by sending an email to AB1513@dir.ca.gov.

Source: Department of Industrial Relations  |  2016 © Copyright Payroll Masters

Payroll Masters is not a licensed insurance broker or agent and does not provide professional or legal advice. This document has been provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please contact your employment attorney in connection with any fact-specific situation in which you intend to take significant employment action. Readers agree that they will hold Payroll Masters in indemnity and Payroll Masters assumes no liability. Payroll Masters is not engaged in rendering legal or accounting services. Therefore, Payroll Masters assumes no responsibility for claims arising from the use or implementation of the above information.