Assembly Bill 1513 Hurts Workers

Assembly Bill 1513 Challenges Farmers on How to Pay Workers

 

By Brian German, Associate Editor

 

New rules for piece-rate compensation and the “safe harbor” provisions addressed in Assembly Bill 1513 are proving to be noticeably complicated and confusing for many employers. Bryan Little, director of labor affairs for the California Farm Bureau Federation (CFBF), which represents members on a multitude of regulatory and legislative issues involving labor policy, talked about the difficulties in making sense of the new regulations.

“People are going to have to look at the administrative burden that will go along with continuing to use piece-rate compensation systems,” said Little, “and look at what kind of competitive position that puts them in. Farmers will need to determine how to compensate their workers.” Little noted that employers will have to, “make some tough decisions about whether or not they want to take the potential legal risk of continuing to use piece-rate.”

Based on his experience both in government, serving with the U.S. Department of Labor, and in agriculture, as chief operating officer for the Farm Employers Labor Service (FELS), Little proposed combining an hourly base wage with incentives to increase production. “So you’re making a minimum base rate of $10 dollars per hour, let’s say; and then you get paid $2 dollars for every piece you produce on top of that,” suggested Little.CFBF logo

Another possibility is a system of compensation, Little explained, with hourly wage tiers based on production. “At a minimum,” said Little, “you’re going to earn $10 dollars an hour; but if you produce 15 to 25 pieces, you’re going to earn $11 dollars an hour. If you produce 25 to 35 pieces, you’re going to earn $13 dollars an hour and so on and so forth.”

“This method of payment would still allow farmworkers to have more direct control over their earnings,” noted Little. “So everyone’s gotten compensated at least for their work time and their other nonproductive time at the base rate required by law, but you can still give them incentives for productivity.”

As with any new legislation, figuring out exactly how it will be enforced will be difficult. Little said maintaining a type of piece-rate compensation, “and making the commitment of resources and time to do it according to legal requirements, will be tough.”

Little suggests, in the interest of erring on the side of caution, it may be best if growers try to implement compensation policies that are the least reflective of typical piece-rate methods. “I think that kind of tiered compensation—hourly compensation rates—might get you far enough away from classic piece-rate compensation that you might be able to make that work,” said Little.

While AB 1513 applies only to California, the state of Washington is also considering similar legislation. Little has been paying close attention to how the issue is being handled there and noted one of the justices from Washington Supreme Court called the piece-rate compensation system, “an economic whip used by employers to force more work out of workers and to use the economic advantage they have over workers to get more out of them.”

Little also mentioned that after talking with a U.S. Department of Agriculture wage and hour administrator, “We are likely to see similar legislation on a national level sometime in the future. Some of the things this administrator says and the way he says them lead me to believe that he probably believes those things too about piece-rate compensation systems. And so this may be the trend,” noted Little.

Although AB 1513 was created with the intention of assisting workers, the actual results are, unfortunately, more likely to be detrimental. “What’s really so counterintuitive about this is that workers, in our experience, really like to be compensated by piece-rate because it gives those who are willing to be more productive and to work harder an opportunity to make more money,” Little noted.

AB-1513 Tough on Piece-Rate

Challenge to Farmworker Piece-Rate Pay May Actually Depress Wages

By Brian German, Associate Editor

Assembly Bill No. 1513 requires employees who are paid on a piece-rate basis to be compensated separately for rest and recovery breaks, and to be paid an hourly wage for non-productive time under the employer’s control, according to Anthony Raimondo, a Fresno-based attorney who has represented farmers and farm labor contractors since 2001.

Raimondo contends that while the bill was designed with the best intentions, its application may be detrimental to farmworkers. “The State of California believes that if piece-rate workers are not paid additional hourly wages for their ten minute breaks, they are being cheated,” Raimondo explained, “even though, every single day, every worker in California on a-piece rate basis always makes above minimum wage for the hours they work on that day.”CA Legislature

Raimondo, who has assisted employers with strategic planning and labor relations and who regularly defends wage claims before the California Labor Commission, elaborated on why farmworkers prefer piece-rate compensation. “You won’t see a day in our fields where a worker on piece-rate’s total earnings total less than what he would have made hourly on a minimum wage. That is why the unintended consequences of these laws will be to depress worker’s wages,” said Raimondo.

“It is why workers demand piece-rate from us; they don’t want hourly wages. Because we work in market-based commodities, the more the employer can tie earnings to production, the higher the wages that employer can deliver to the worker. They are both benefitting from an economic bargain that generates revenue through the ranch for both the employer and the employee. When compensation is tied to production, everybody makes more money,” he noted.