Gimme Shelter: A Safe Harbor Deadline Looms for California Piece-Rate Employers

Piece-rate employers in California have faced a surge of class action lawsuits in recent years seeking substantial sums for the failure to separately pay for rest breaks and nonproductive time. On January 1, 2016, California Labor Code section 226.2 went into effect, requiring employers to separately compensate piece-rate employees for rest break and nonproductive time. But the statute also offers piece-rate employers a safe harbor option to clear the decks of liability as to certain wage and hour claims, provided the employer makes the election by July 1, 2016. Before this deadline passes, piece-rate employers must take stock of their potential liability and the relative risks of accepting or declining this safe harbor.

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