Can my employer pay me a piece rate and not an hourly wage for all hours worked in California?

Question:

I work as a massage therapist for a hotel spa in California. I’m usually at the spa Tuesday through Saturday, from 9:00am to 6:00pm. On busy days, I have six or seven clients, but on slow days I have only three or four. Each massage takes about an hour. The hotel pays me $50 for each massage, but I don’t get paid for the hours in between appointments while I’m at the spa. When I’m not with clients, I sometimes answer calls or do administrative work, and sometimes I’m just sitting around waiting for my next appointment to come in. Does my employer have to pay me for this time?

Answer: Yes, your employer has to pay you for all hours that you’re required to be at the spa. In the past, employers used to argue that they could avoid paying minimum wage for all hours worked, as long as the piece rate averaged out to at least minimum wage for all hours worked. For example, your employer might argue that even on slow days, you’re getting $150-$200, which averages out to well more than minimum wage for the nine hours that you’re at the spa.

Fortunately for you, California courts have specifically rejected this argument. When an employer agrees to pay an employee on a piece rate basis, those payments count only towards the activities for which the piece rate is being paid. In other words, the $50 rate applies only to the time spent giving massages. For all other time that you’re required to be at the spa, you are entitled to at least minimum wage. So, for example, if you give four massages during a nine hour period, you’re entitled to $200 for the time spent giving massages and $9 per hour (California minimum wage as of July 2014) for the remaining five hours in between appointments.

Of course, your employer can assign other tasks for you to perform while you’re not with clients. Or, your employer can rearrange your schedule so that all of your appointments are back-to-back, avoiding the need to pay for time in between appointments.

Your employer may also try to argue that you’re an independent contractor, not an employee, and therefore not entitled to minimum wage. In California, businesses can agree to pay independent contractors on a piece rate basis without paying minimum wage or overtime. However, it’s up to your employer to prove that you’re an independent contractor. This may be difficult to do in your case because you work a regular schedule, at the hotel spa, using the materials and equipment provided by the hotel. If you also receive training and supervision, are subject to discipline, and all of the appointments are booked through the hotel, you would most likely be considered an employee. For more information, see our article on the independent contractor analysis in California.

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