California requires that employees are compensated at least minimum wage for all hours worked. Normally this is only an issue for employees who are paid straight piece rate, and their piece-based compensation is less than the state minimum hourly wage. Because it is not always possible to count employee production units by exact hour increments, Pago ensures that minimum wage is paid by the hours worked in a particular job or work assignment. This may result in employees receiving minimum wage adjustments, even though an employee's compensation exceeds minimum wage for the entire day.
Scenario 1:The employee works on one work assignment for the day and does not meet the minimum wage.
Work Assignment
Employee works 6 hours.
Piece rate based compensation is $60.00 (30 units x $2.00/unit)
Non-Productive (NPT) pay: $4.98
Rest-and-Recovery (RNR) Pay: $4.33
Total Pay: $69.31
Minimum wage for hours worked is $78.00 (6 hrs x $13.00/hr)
The employee will receive a minimum adjustment of $8.69 ($78.00 - $69.31)
Scenario 2: The employee works on multiple work assignments for the day and does not meet minimum wage for one of the work assignments.
Work Assignment #1
Employee works 3 hours.
Piece rate based compensation is $20.00 (10 units x $2.00/unit)
Minimum wage for hours worked is $39.00 (3 hrs x $13.00/hr)
Employee did not make minimum wage for the work assignment.
Work Assignment #2
Employee works 5 hours.
Piece rate based compensation is $100.00 (50 units x $2.00/unit)
Minimum wage for hours worked is $65.00 (5 hrs x $13.00/hr)
Employee made minimum wage for the work assignment.
Total piece rate based compensation for the day is $120.00 (60 units x $2.00/unit)
Minimum wage for 8 hours worked is $104.00 (8 hrs x $13.00/hr)
Even though the employee was compensated more the minimum wage for the day, the employee did not make minimum wage for Work Assignment #1. Pago will give the employee a minimum wage adjustment of $19.00 for Work Assignment #1. This ensures that the employee receives minimum wage for every hour worked.
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