Following the Washington Supreme Court’s July 16 ruling on Demetrio v. Sakuma, growers in the state are required to pay for rest breaks to piece rate workers immediately. Below are tips and recommendations on how to work with the changes from the Washington Farm Labor Association (WAFLA) and the law firm of Stokes Lawrence employment group.

 

From Stokes Lawrence:

Starting today, employers should implement the following wage practices:

1.  Schedule rest breaks and ensure that employees take them. It is the employer’s obligation to make sure that rest breaks are taken. You should schedule your rest break times and enforce them. Make sure that they are being taken. Document rest break times daily to avoid disputes. For practical purposes, rest breaks begin when the last worker either leaves the field or work area and end when the first person returns to the work area.

Recommended practice: Require employees to confirm in writing that rest breaks were taken each pay period.

2.  Rest breaks must be paid separately. You will need to add 10 minutes of extra pay for each rest break. Rest breaks are 10 minutes every four hours.

3.  Rest breaks are paid at each employee’s applicable earned rate (not minimum wage). Rest breaks are paid based upon the individual piece rate earned per pay period on an employee by employee basis.  Each employee will likely have a different rate and those rates will change pay period to pay period. The effective piece rate calculation for rest breaks is slightly different than the one that you are doing to ensure piece rate pay is at least equivalent to the minimum wage each pay period.

(Read the full blog post at: “Washington Supreme Court Rules Piece Rate Workers Entitled to Paid Rest Breaks”).

 

 

From WAFLA:

Supreme Court Rules that extra pay is required for piece rate workers. Is it retroactive? Not sure.

The Supreme Court today ruled that employers of agricultural workers who pay workers by piece rate must provide extra pay for rest breaks, thus judicially rewriting a regulation which states that piece rate earnings should be included when determining whether workers qualify for extra pay. In essence, the Court ruled the plain language of the regulation requires that the break be on the employer’s time, and thus extra pay is required. The court also ruled that rest breaks are mandatory, while the regulation states that rest breaks “shall be allowed.”

The Court stated that the amount of extra pay should be paid at whatever the worker earned during piece rate. In other words, if the worker is paid $20 per bin and produced 40 bins in a 50 hour pay period, that worker is entitled to rest break pay at $16 per hour.  If the worker was required to take two breaks each day at 10 minutes each, the worker would be entitled to an extra $26.67 for rest breaks for that weekly pay period.

Here is how Adam Belzberg, a partner at Stoel Rives and the attorney for the defendant farmer, put it: “The Court relied on the illogical belief – without any supporting evidence – that the inclusion of rest break pay within the piece rate somehow incentivizes employers to employ fewer workers, and fosters a culture of working through breaks. In reality, the Court’s ruling will do nothing to protect these stated interests, and simply opens the door to a flood of litigation that will expand far beyond agriculture to include any Washington employer using a pure piece-rate or commission pay system.”

Finally, the Court did not cover the issue of retroactivity. We expect that contingent fee attorneys will begin filing cases for workers now asking for back pay, penalties, and attorney fees for the past three years. The cost to the agricultural industry could be in the tens of millions – it is very tough to estimate. Our hope is that lower courts will decline to allow retroactivity and recognize that the Supreme Court has essentially acted like a legislative body in rewriting the regulation.

Why would the Court choose to rewrite a regulation? The Washington State Supreme Court sees itself as a policy making body. The Court reasoned that the purpose of the regulation is to allow workers to take rest breaks, and therefore they did not believe that piece rate earnings should be included in the compensation for rest breaks, despite the specific language in the regulation which is contrary.

Here are a few questions farmers may be asking:

Question: I can establish a similar compensation scheme using hourly pay and a bonus.  Will this work?

Answer: We think so. In the example above, if a farmer paid $10 per hour plus a $7.50 per bin bonus, the worker who picked the same 40 bins in a 50 hour work week would receive the same $800 for the week, but in this case the farmer would not need to calculate extra pay for rest breaks. Unfortunately, workers prefer a straight piece rate system, and therefore farmers face an uphill battle trying to explain how hourly plus a bonus achieves the same result.

Question: Other than moving to hourly plus bonus, how can I comply?

Answer: In reading the Court decision, it appears that employers must immediately begin paying extra for rest breaks on a per payroll basis. Therefore, the most conservative strategy would be for employers to provide a bonus check, at each payday, which is equal to the number of rest breaks multiplied by ten minutes per rest break (if that is the length of the break) multiplied by the combined hourly wage that was earned considering all hours and all wages for the period. We hope you have a good accountant or accounting program.

Question: Workers signed an agreement wherein they understood that piece rate earnings included rest breaks. Are these agreements valid?

Answer: Probably not. In one section of the opinion, the Court stated that the rate at which piece rates are paid might be subject to voluntary bargaining, but other parts of the opinion state that piece rate workers must be compensated for breaks at the applicable minimum wage or the employee’s regular rate, whichever is greater.

Question: The regulation states that rest breaks “shall be allowed.” What if I allow a rest break and a worker chooses not to take it?

Answer: The Court left no doubt that rest breaks are mandatory, stating: “It is not enough for an employer to simply schedule time throughout the day during which an employee can take a break if he or she chooses.” In the words of the Court, “employers must affirmatively promote meaningful rest time.” If a worker chooses not to take a rest break the employer should consult with legal counsel and ultimately may impose disciplinary action.

Question: I am an H-2A employer. My H-2A contract states that I will follow the Supreme Court decision. Now what?

Answer: Wafla is reaching out to H-2A employers to determine how to best follow the Court’s advice within the confines of the H-2A program.