Court Issues Temporary Restraining Order for AB 1513 & Piece-Rate Safe Harbor

By XobeeAdmin on July 1, 2016 in Legal Update

Yesterday, a Fresno County Judge issued a temporary restraining order (“TRO”) against the enforcement of AB 1513’s Safe Harbor registration deadline. AB 1513 established a “Safe Harbor” procedure to obtain an affirmative defense to wage claims for failing to properly compensate piece-rate employees. The AB 1513 deadline for employers to give notice to the State of their intent to make Safe Harbor payments was July 1, 2016.

The TRO prohibits the state agencies named in the lawsuit from enforcing the July 1 deadline and tolls the deadline until 10 days after the TRO expires. Presently, the TRO is set to expire on July 18, 2016 when a hearing on a preliminary injunction will take place. The Court may further prohibit enforcement of AB 1513’s Safe Harbor at that time.

Presently, the best interpretation of the Order is that the Safe Harbor registration deadline is effectively extended until after the TRO expires. Employers who have not yet registered for Safe Harbor appear to have more time to consider their options and wait to see the outcome of the July 18th hearing.

The TRO enjoining AB 1513 does not appear to have any effect on case law regarding piece-rate compensation. Gonzalez v. Downtown LA Motors and Bluford v. Safeway still require the separate compensation of at least minimum wage for non-productive time and rest periods.

Employers should consult with qualified legal counsel as to piece-rate compensation requirements and the Safe Harbor procedure.

We will address the impact of the TRO on AB 1513 during our July 7th Webinar: California Mid-Year Employment Law Update. For more information and to register for the upcoming webinar, click here: