Washington high court rejects separate pay for not-piece-rate work
September 6, 2019
The Washington state Supreme Court sided with Knight Transportation in a class action wage lawsuit. The court ruled that employees who are paid on a piecework basis are not entitled to hourly rates for time performing other work-related tasks, such as loading and unloading.
On Thursday, Sept. 5, the Washington Supreme Court entered its opinion on the Sampson v. Knight Transportation lawsuit. The high court was tasked to answer the following question: Does the Washington Minimum Wage Act require nonagricultural employers to pay their piece-rate employees per hour for time spent performing activities outside of piece-rate work?
“The answer is no,” the court bluntly answered in a 6-3 decision.
According to the Minimum Wage Act, all workers must be compensated for all hours worked in a workweek. The Supreme Court ruled that state law allows employers for nonagricultural employees to meet that burden by “ensuring that the total wages for the week do not fall below the statutory minimum wage for each hour worked.”
Based on those laws, the court ruled that Knight Transportation truckers failed to demonstrate that they were not paid for time spent loading and unloading, pre-trip inspections, fueling, detention at a shipper or consignee, washing trucks and other similar activities.
Piece-rate vs. hours worked
According to court documents, Knight pays it drivers in two ways. Long-haul drivers are paid a mileage-based piece rate that is based on estimated miles rather than actual miles driven. Rates vary based on trip length and is “intended to compensate the driver for time spent driving as well as for routine nondriving tasks associated with the trip, including weighing loads, filling out paperwork, conducting vehicle inspections, securing and caring for cargo, performing maintenance activities, fueling and washing the truck, and up to two hours of wait time at the shipper or consignee facility.”
Long-haul drivers are also paid an extra flat fee for certain additional work, including hand loading/unloading, making extra stops, crossing borders and waiting more than two hours at the shipper.
Meanwhile, short-haul drivers are paid in a similar fashion. Other than receiving a mileage-based rate, they are paid a flat rate for each round trip.
Despite compensation intended to make up for other duties worked, drivers argue that those rates do not reflect the actual time spent on completing those other nondriving tasks. Rather, that time is simply lumped in with the piece rate. If their pay was divided by the number of actual hours worked, the rate would be less than minimum wage.
State piecework law vs. state minimum wage law
Although state minimum wage law states that all employers must pay an hourly rate no less than the established minimum wage, a separate state code addressing piecework allows employers to meet that standard by dividing total wages earned in a week by total hours worked. This is known as “workweek averaging,” according to court documents.
Based on that code, Knight argued that drivers are paid no less than minimum wage by averaging all hours worked. However, the drivers counterargue that another Supreme Court case, Carranza v. Dovex Fruit Co., suggests that it must be interpreted to authorize workweek averaging only with hours spent on the piecework. Meaning, hours spent on tasks outside the piecework must be separately paid at an hourly rate.
Unfortunately, the state Supreme Court case cited by drivers involved agricultural workers, who are exempt from the state code in question. This is the first time the high court would rule on piecework compensation and minimum wage regarding the code applicable to nonagricultural employees, which reads as followed:
Where employees are paid on a commission or piecework basis, wholly or partially,
(1) The amount earned on such basis in each work-week period may be credited as a part of the total wage for that period; and
(2) The total wages paid for such period shall be computed on the hours worked in that period resulting in no less than the applicable minimum wage rate.
Accordingly, the Supreme Court ruled that the plain language of the code allows workweek averaging of all hours for nonagricultural workers paid on a piecework basis, without separating work that wasn’t piece-rate.
Writing the dissent, Justice Susan Owens argued that the Carranza case was based on only the Minimum Wage Act, not the specific code applicable to agricultural jobs. Therefore, a decision based on the act “applies equally to both agricultural and nonagricultural employees,” Owens argues.
In Carranza, Dovex paid employees on a piece-rate basis by compensating per basket of fruit picked. However, workers argued they were paid less than minimum wage when accounting for all the work done not picking fruit, like setting up and transporting ladders, mandatory meetings, etc. In that case, the Supreme Court agreed with the workers.
The majority opinion in the Knight Transportation case justified its ruling by pointing out the state code that exempts agricultural workers. However, Owens argues that the Carranza decision was never based on piecework state code. Rather it was based on the more overarching Minimum Wage Act.
“Because Carranza supplied the plain meaning of the MWA, which applies to both agricultural and nonagricultural employers equally, Carranza necessarily requires that all employees who are paid on a piece-rate basis be entitled to separate hourly compensation for time spent performing tasks outside of their piece-rate work,” Owens opined.