KPA’s compliance partner, FordHarrison, provided the following content.
California’s minimum wage laws are among employers’ most common questions. Below, is a summary of frequently asked questions to help you stay compliant.
1. What is California’s current minimum wage law for non-exempt employees?
It depends on how many employees you have. The updated minimum wage schedule for California employees is as follows:
However, if employees work in any of the following cities or counties, a higher minimum wage applies:
- City of Los Angeles
- County of Los Angeles
- City or County of San Francisco
- City of Emeryville
- City of San Jose
- City of Oakland
- City of San Diego
- City of Pasadena
- City of Berkeley
- City of Santa Monica
- City of Malibu
- City of Mountain View
- City of Palo Alto
- City of San Leandro
- City of Cupertino
- City of Milpitas
- City of Sunnyvale
- City of Santa Clara
- City of San Mateo
- City of Richmond
- City of El Cerrito
2. What information needs to be itemized on a pay check stub in California?
Basically, there are at least 9 pieces of information that need to be included on paycheck stubs:
- Gross wages earned
- Total hours worked by the employee
- The number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis
- All deductions, provided that all deductions made on written orders of the employee may be aggregated and shown as one item
- Net wages earned
- The inclusive dates of the period for which the employee is paid
- The name of the employee and only the last four digits of his or her social security number or an employee identification number other than a social security number
- The name and address of the legal entity that is the employer, and
- All applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.
For piece-rate employees, there is an additional requirement to include pay rates and hours worked for rest and recovery periods and non-productive hours worked.
3. What are commissions?
Commissions are: “Compensation paid to any person for services rendered in the sale of such employer’s property or services and based proportionately upon the amount or value thereof.” Labor Code § 204.1; Keyes Motors v. DLSE (1987) 197 Cal.App.3d 557.
4. Do I have to pay my commissioned employees minimum wages in addition to commissions?
Yes, for rest breaks and all non-productive hours worked. Moreover, the wages cannot be included or averaged with the commissions to meet the minimum wage requirements. Vaquero v. Stoneledge Furniture, LLC, 9 Cal. App. 5th 98 (Feb. 28, 2017)
5. What is piece-rate work?
The American Heritage Dictionary defines the term piece rate as: “Work paid for according to the number of units turned out.” A piece rate must be based upon an ascertainable figure paid for completing a particular task or making a particular piece of goods.
6. What is the piece-rate compensation law (Labor Code section 226.2) require?
It requires employers to pay their piece-rate employees for rest and recovery periods and “other nonproductive time” going forward from the effective date of the statute, and further requires these to be itemized on these employees’ wage statements.
7. When did the piece-rate law go into effect?
January 1, 2016
8. Does the piece-rate law apply to employees paid on commissions?
No. The only applies to nonexempt employees paid on a piece-rate basis.
9. What are the compensation requirements for piece-rate paid employees?
The rate of compensation for rest and recovery periods shall be the higher of:
- An average hourly rate determined by dividing the total compensation for the workweek, exclusive of compensation for rest and recovery periods and any premium compensation for overtime, by the total hours worked during the workweek, exclusive of rest and recovery periods. ~OR~
- The applicable minimum wage.
About our guest blogger, Alexandria Witte of FordHarrison
Alex is an attorney at law with extensive experience navigating complex class action and representative action disputes under California’s Private Attorney General Act of 2004. Alex also has significant experience defending against single plaintiff claims for violations of California’s wage-and-hour laws including claims for missed meal and rest breaks, unpaid overtime, business expense reimbursements, and misclassification, as well as claims for wrongful termination, retaliation, harassment, and discrimination.
Alex has been named by Super Lawyers as a “Southern California Rising Star” in 2014, 2015, and 2016.