Farmers Fight California Piece-Rate Wage Law

FRESNO, Calif. (CN) — Farmers in California's Central Valley say a state law setting pay rates for piece-rate workers' nonproductive time is unconstitutionally vague, to the detriment of employers and workers.

Assembly Bill 1513, by Assemblyman Das Williams, D-Santa Barbara, requires employers to compensate piece-rate employees for rest breaks and other nonproductive time at or above specified minimum hourly rates. Gov. Jerry Brown signed the bill into law in 2015. The Nisei Farmers League, representing more than 1,000 farmers and packers, says the law is so confusing it "effectively eliminates piece-rate compensation in California by making it impossible for employers to know how to pay employees."

Since 1919, California has allowed employers to pay workers on a "piece-rate" basis, incentive-based compensation that is integral to the agricultural industry, the league says.

"(N)umerous studies show that, as compared to hourly compensation, piece rate has the potential to increase employees' compensation as well as their productivity, which creates numerous benefits for employees and employers, and ultimately cost savings for consumers," the league says in the June 27 complaint in Fresno County Court.

Assembly Bill 1512, which took effect Jan. 1, is so vaguely written, complex and murky that employers can no longer pay on a piece-rate basis without risking government investigation or civil lawsuits, the league says.

The farmers take issue with the law's definition of "other nonproductive time" as time "that is not directly related to the activity being compensated on a piece-rate basis."

"The phrases 'nonproductive time' and 'directly related' are so vague that neither Nisei Farmers League nor its members can structure their conduct in such a way as to know, with any degree of certainty or otherwise, how to act in compliance," the complaint states.

Farmers are bound to run into real-life ambiguities when it comes to what is and what is not considered "other nonproductive time," the league says.

"What about a worker who works more slowly because of more frequent pauses while harvesting — is each and every one of those pauses 'other nonproductive time'? And how long does the pause or break need to last before it becomes 'other nonproductive time'? What about bathroom breaks? What about a worker who chooses to make a personal cell phone call while remaining on the employer's premises?"

Employers will also face significant time-monitoring and recordkeeping problems for piece-rate compensation, the farmers say.

"How are employers supposed to identify and accurately record 'nonproductive' time to ensure it is properly compensated and to sufficiently document that it was compensated fully and correctly? They must now do so to avoid or defend against claim for non-payment of underpayment of wages," the league says.

The vagueness of the law all but guarantees arbitrary and discriminatory enforcement, the league says.

Employees also face the possibility of being paid less, according to the complaint.

"Continuing to restrict or burden an employer's use of piece-rate pay by making it even more costly and difficult to administer causes more harm to an employee than increased protection," the league says.

The farmers also take issue with the statute's safe-harbor provision, by which employers can pay back wages to workers in return for protection from employment lawsuits and other penalties.

To take advantage of this affirmative defense, employers must sign up by July 1, and retroactively pay any actual sums due for the period between July 1, 2012, and Dec. 21, 2015.

The farmers say this safe harbor is also riddled with vague and unclear requirements, as the determination of what constitutes "actual sums" is still in dispute and unsettled.

"If an employer agrees to pay 'actual sums due,' and does not pay anything additional based on the supportable belief that no further sums are due, but a court later disagrees, that employer will have exposed itself to civil damages and penalties, and potentially criminal penalties, when it could have paid the sums due had it known what sums were due," the league says.

The farmers seek declaratory judgment that the law is unconstitutionally vague and arbitrary, violates due process, establishes retroactive punishment, imposes unconstitutional takings and violates the Contract Clause. They want its enforcement enjoined.

Named as defendants are the California Labor and Workforce Development Agency, the Department of Industrial Relations and the Division of Labor Standards Enforcement.

Neither the Nisei Farmers League nor state officials responded to a request for comment.

A Nisei is a person of Japanese heritage who was born in the United States to Japanese-born parents (Issei). The children of Nisei are known as Sansei, the three terms coming from the Japanese words for one, two and three: ichi, ni, san.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit