A few months ago, Governor Brown signed Assembly Bill 1513 into law, which will have a drastic impact on the way piece work is handled in the construction industry. If you own a construction or contracting business in California, then it is important that you understand the details about AB 1513 and how this new law will impact your business.

How Did AB 1513 Come to Be?

This law was the result of a settlement negotiated between the Department of Labor and the agricultural business. The settlement was designed to resolve conflicts that have been occurring because of disagreements with violations of piecework projects.

Even though the law was designed to help with this particular settlement, the wording of the law is actually quite vague. As a result, it now covers all piece rate workers in the state of California, including businesses in the Building Trade industry.

Requirements of AB 1513

There are several requirements listed by AB 1513, and it is important that you study these details to understand how the new rules will impact your business. For example, it is now necessary to calculate separate compensation for non-productive time related to recovery and rest periods for weekly piece rate work. Then, this information must be provided to employees on the paystub, detailing the piece rate information and overall compensation.

The difficulty with these requirements is that the calculations are quite labor intensive, and this process drastically changes the way piece rate employees are paid. Additionally, these calculations need to be considered for the period between July 1, 2012 and December 31, 2015. So, the changes impact past payments, and it is also necessary to implement changes on a going-forward basis. Make sure that you learn more about the interest rate payments that need to be met, as well as payroll taxes and workers compensation requirements that are applicable.

What’s the Bottom Line of AB 1513?

In summary, AB 1513 requires that employers pay piece rate employees quite a bit of back pay to meet these requirements. New systems will need to be put into place to ensure that the wages for rest time and nonproductive time are calculated correctly. Since the law has already been signed, it is necessary for you to take action right away to implement these changes into your business.

At Cal-State Contractors License Service, we work hard to keep you up-to-date on any legal changes that impact the construction industry. We understand that it can be hard to keep up with the laws and license requirements, and we are here to make the process easier for you. If you need help with the paperwork for your contractor’s licenses, then we invite you to contact us right away for more information: 1-800-454-2776