Bonuses May Increase Rest Break Pay for Farm Workers

Aug 18, 2016

By Ellen S. Jackson and Sarah L. Wixson | Related Practices: Agriculture and Employment

Piece rate workers who earn a nondiscretionary bonus are entitled to additional rest break pay under final guidance issued by the state Department of Labor and Industries (L&I).

Agricultural employers  have been paying piece rate workers separately for rest breaks since the July 2015 Washington Supreme Court decision in Demetrio & Paz v. Sakuma Bros. Farms.  There the Court found that agricultural piece rate workers were entitled to separate pay for rest breaks at their “regular rate,”  a rate based upon their productivity for the week.  L&I’s  revised administrative policy clarifies that “nondiscretionary bonuses must be included in the piece rate worker’s regular rate of pay.”

A discretionary bonus is essentially a gift, given by the employer without any incentive.  However, the majority of bonuses in the agricultural industry are nondiscretionary.  A nondiscretionary bonus is essentially a promise, expressed or implied, and is earned, not given.  For example, an employee earns a nondiscretionary bonus if she stays until the end of the season or meets a certain production goal.

When a piece rate employee earns a nondiscretionary bonus, additional rest break pay is also owed.  L&I gives the employer two ways to calculate the additional rest break pay.  The employer may either:

  1. Recalculate the rest period rate retroactively, or
  2. Credit the bonus to the work week in which the bonus is paid and calculate the rest periods for that work week accordingly.

Many agricultural workers will work some periods on an hourly rate of pay and other periods on piece rate.  Hourly employees are not entitled to separate pay for rest periods.  However,  L&I’s guidance expands the separate rest break pay requirements to hourly workers who earn a production-based bonus.  In such a case, the hourly worker would be entitled to separate and additional rest break pay based on the amount of the production-based payment.   

L&I’s revised administrative polices regarding rest breaks can be found at: http://www.lni.wa.gov/WorkplaceRights/files/policies/esc62.pdf.

If you have questions regarding L&I’s new administrative policy, please feel free to contact attorney Sarah Wixson at (509) 895-0065.

For questions about legal issues impacting your business, contact a member of the Stokes Lawrence Velikanje Moore & Shore Agriculture practice.