Compliance with California labor laws

Pago compliance engine

The Pago software platform includes a "compliance engine" that automatically reviews employee time and production data to ensure that employees are compensated in compliance with labor laws. When the Pago compliance engine processes employee time and production data, Pago provides visual indicators to let you know the status of the compliance checks. These visual indicators are visible when viewing crew work assignments and when viewing the employees who are clocked into the work assignments.

Pago compliance visual indicators

 A green checkmark indicates that the employee compensation data has been checked and it complies with labor laws.

A orange time clock mark indicates that the employee compensation data has been checked and Pago has added additional pay to the employee's compensation to comply with labor laws (overtime, minimum wage, etc.)

An brown exclamation mark indicates that the Pago compliance engine has run, but it found a problem with the employee data that requires your attention (for example missing clock outs). A message will display when you hover your mouse over the button to give you information about the problem found by the compliance engine. You should "fix" any problems found and make sure compliance checks pass (green checkmark or orange time clock) before processing payroll.

(Note: The Pago compliance engine does not check employee compensation until daily work assignments are moved into the "Finished Timekeeping" status.)

Pago automatic pay adjustments

If the Pago compliance engine needs to add any additional pay to an employee's compensation, Pago will provide visual indicators calling attention to the pay adjustments. In the employee time records, pay adjustments are highlighted in yellow. These Pago pay adjustments are not editable by users, ensuring that Pago compliance engine produces accurate employee compensation that complies with labor laws.

(Screenshot of employee pay adjustments - yellow highlights)

California Wage Orders

The Pago compliance engine enforces the compensation rules of the California wage orders related to agriculture, including wage orders 8, 13, and 14.

Wage Order 8 - Industries handling products after harvest

Wage Order 13 - Industries preparing agricultural products for market, on the farm

Wage Order 14 - Agricultural occupations

These wage orders specify various compensation rules enforced by Pago including daily overtime, weekly overtime, 7th consecutive day, doubletime, alternative workday schedule (including split shifts), minimum wage, rest periods, and meal periods, including missed break and meal period penalties, and meal waivers. Pago has a built-in schedule for the changes in the California minimum wage. Pago also has a built-in schedule for the changes in overtime hours for agricultural workers working in Wage Order 14, as mandated by California AB 1066. With the built-in schedules, Pago will automatically enforce changes in overtime and minimum wage on the appropriate effective dates. Adjustments to employee compensation are calculated based on the employee "regular rate of pay", which Pago calculates in compliance with labor laws.

If an employee works in multiple wage orders in the same period, the Pago compliance engine will enforce the compliance rules that are more generous to the employee. For example, if an employee works in both wage order 8 (8 hour overtime) and wage order 14 (9.5 hour overtime in 2019) in the same pay period, Pago will enforce the more generous 8 hour overtime for the entire pay period.

When job compensation is configured in Pago, you select the appropriate wage order for the work performed. The Pago compliance engine enforces the compliance rules for the selected wage order.

(Screenshot of Wage Regulation selection)

More information about California wage orders can be found on the State of California Department of Industrial Relations website: https://www.dir.ca.gov/IWC/WageOrderIndustries.htm

More information about California AB 1066 (Phase-In Overtime for Agricultural Workers Act of 2016) can be found on the State of California Legislature website: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB1066

California Piece Rate Compensation

Pago has three employee pay types: (1) hourly, (2) piece rate, and (3) hourly plus piece-based bonus. For piece rate and hourly plus piece-based bonus pay, the Pago compliance engine enforces compensation rules that comply with California piece rate laws, including AB 1513. Employees are compensated for rest and recovery periods and nonproductive time separately from hourly and piece rate compensation. Pago ensures that employees receive at least minimum wage for their piece rate compensation. Pago properly calculates employee rest and recovery hourly compensation rates, based on the calculation rules of AB 1513. For piece rate compensation, Pago keeps track of nonproductive time, and allows for the entry of actual nonproductive time or reasonable time estimates of nonproductive time. Nonproductive time can be compensated at minimum wage, or another higher hourly rate. If an employee's compensation is subject to piece rate rules and the employee works overtime, then the employee's overtime compensation is calculated using the regular rate of pay, in accordance to AB 1513.

(Screenshot of Pay Type selection)

More information about California AB 1513 (Piece-Rate Compensation) can be found on the State of California Legislature website: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201520160AB1513