April 13, 2015
AgSafe Nonproductive Time Announcement
A recent announcement at AgSafe reveals that the Governor is finally "catching on" to how
convoluted and costly this whole nonproductive time (NPT) issue is for the industry.
Some growers are even expecting a visit from a group of the Governor's people along with Julie Su,
the Labor Commissioner, for their review of the payroll calculations and checks so they can see the
complicated and burdensome process that results in extremely long wage statements.
Several growers are already providing a line item for each type of NPT activity whether it is
mandatory exercises, training, safety meetings, travel time, etc.
Finally, at a recent AgSafe conference it was announced that an inside and direct telephone call with
Julie Su herself, verified and informed that an announcement to the entire audience was requested.
This announcement was that the DLSE will no longer accept a weekly calculation and accounting of
the piece rate but required a DAILY calculation.
SLG has checked the website and has called over to its DLSE contacts to verify this alleged
enforcement position and it has not been confirmed. At least one association has weighed in and has
no evidence to support the above interpretation and is not aware of any reason to follow such a
standard.
There have been questions asked about the daily minimum wage obligation and calculation of NPT on
a daily basis. We can confirm that because of the daily minimum wage obligation all hours must be
paid at the agreed rate and no part of the agreed rate may be used as a credit against the daily
Minimum Wage obligation. In other words, averaging of wages paid under a contract rate within a
particular pay period in order to determine whether the employer complied with its Minimum Wage
obligation is not permitted under the circumstances. Whereas here, the employees are paid different
rates for certain activities that all constitute "hours worked" within the meaning of state law. An
employer cannot use activities that were compensated at equal to or greater than minimum wage as
a credit for satisfying the daily Minimum Wage obligation for those activities that under the contract
terms, are to be compensated at less than the Minimum Wage. To do so would be a violation of state
law.
Considering that minimum wage is guaranteed on a DAILY basis, according to the Labor Code, while
employers may calculate on a weekly basis an employee's piece rate earnings*, an employer, for
example that is guaranteeing $10.00 per hour for each hour worked would need to add in DAILY any
Minimum wage adjustments BEFORE the weekly average is calculated. *(The calculation is: weekly
piece rate earnings divided by weekly piece rate hours to arrive at the average weekly piece rate for
the purpose of paying rest periods.)
Simplified, it is acceptable to calculate the NPT rates on a DAILY basis and not on a WEEKLY basis.
Thus, in the example above every day the NPT rate would be at least $10.00 per hour, and there
would be no issue of weekly averaging.
It is commonly known that the only reason several employers that were calculating on a DAILY basis
changed to a system of WEEKLY was to be more in line with the Labor Commissioner's examples,
which of course make no mention of when to add in any minimum wage calculations. Again, it is
apparent that the Labor Commissioner has no idea of the complexity of the payroll systems, and
what burdens the DLSE's enforcement position is placing on the industry. Just to be clear, Minimum
Wage has always been required to be calculated on a DAILY basis, the question becomes how does
that impact the NPT rate and how that is to being calculated to be in compliance with the DLSE
enforcement position.