Like all compensation methods, piece rate compensation plans – under which an employee is compensated based on the number of “pieces” he or she generates or completes – must be analyzed for wage-and-hour compliance. For example, under federal law, minimum wage generally is due for all hours worked, and there are recordkeeping obligations, although some piece rate plans may qualify for the section 7(i) overtime exemption. Under state law, employers also must analyze whether piece rate employees’ compensation meets all applicable requirements, which supplement FLSA requirements for most employers. A new decision from Washington state’s highest court reinforces this last principle and imposes further payment obligations on certain Washington employers. Demetrio v. Sakuma Bros. Farms, Inc., 2015 Wash. LEXIS 807 (Wash. July 16, 2015).
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