Agriculture is a crown jewel of Washington state’s economy, accounting for more than $20 billion in revenue. In the tri-county area, Southwest Washington boasts more than 2,500 farms, most of which rely on seasonal workers to harvest crops, many of which are compensated based on how much they pick, known as “piece rate.”
In July 2015, the Washington Supreme Court ruled that farm and ag workers who are compensated based on how much they pick, produce or harvest must be paid for 10-minute breaks based on what they could have earned had they not stopped to rest. The mandate also required that workers receive one rest period every four hours. The decision, which followed a case involving the Sakuma Brothers berry farm in Skagit County, was enacted because the piece-rate scheme encouraged workers to produce more and work harder by skipping breaks. Three-plus years later, the Sakuma Break Rule, as it has come to be known, may still be confusing to piece-rate employers.
Local farmers and food processors who use a piece-rate pay structure need to know three essential requirements to make sure they comply with the law. Here is a refresher on the basics:
Piece-rate workers must be paid at least the equivalent of the state minimum wage. To ensure workers are adequately compensated, businesses must take the piece rate and divide it by the standard unit production. For example, Washington’s minimum wage is $11.50. That means that a piece-rate worker must earn $0.115 per piece and be able to produce at least 100 units in one hour. If the pay per piece does not equal the minimum wage for the time it took to create those pieces, the business must make up the difference. The U.S. Department of Labor has an online calculator to help determine the minimum piece rate.
Employers can mandate breaks at periodic intervals to avoid logistical problems. The law requires 10-minute breaks every four hours – but that doesn’t mean workers can take a break whenever they wish, especially if having one person on break disrupts production, as would be the case in a food processing company that uses a conveyor belt to produce goods. Scheduling breaks also makes it easier to track time worked and time on break, which is another requirement under the ruling and must be listed separately on pay stubs.
Rest breaks are considered “on the employer’s time” and must be calculated separately from earned time. Rest breaks must be paid at each employee’s earned rate, not based on total hours while at work. As an example, suppose a worker “made” 4,000 pieces in one week. Their earnings on those pieces would equate to $460 for the week (4,000 x $0.115). When divided by 40 hours of a typical work week, that equates to $11.50 per hour, or minimum wage. However, we must assume the worker took two 10-minute breaks per day during those 40 hours, or the equivalent of 1.67 hours. Under the Sakuma Break rules, the worker’s $460 must be divided by 38.33 hours of earned time, which equates to $12 per hour. That $12 hourly rate must be paid on the entirety of the 40 hours while on the job.
If an employer does not compensate piece-rate workers for breaks, they are not only out of compliance, but workers can file for back pay up to three years in arrears.
As the industry heads into the biggest season of the year, farmers, growers and processors should make sure they are following all labor laws concerning piece-rate workers, especially as it relates to minimum wage and break compensation. Paying hardworking laborers equitably is not only their right, it’s the right thing to do.
Tiffany Couch is CEO and founder of Acuity Forensics, a nationally recognized forensic accounting firm based in Vancouver. She is also the author of The Thief in Your Company, a book that explores the financial and emotional impact of fraud on organizations of all sizes. She can be reached at tcouch@acuityforensics.com or (360) 573-5158.
