What AB 1513 Requires in Plain English
California Assembly Bill 1513 (codified as Labor Code Section 226.2) requires employers who pay piece rate to do three things: pay rest and recovery periods separately at the regular rate, pay nonproductive time at no less than minimum wage, and itemize all of it on the wage statement. If you run piece rate crews in California and you are not doing all three, you are exposed.
Why This Law Exists
Before AB 1513, most contractors in California handled piece rate the same way I did when I ran roofing crews. You paid the crew based on production. Period. If a guy took a ten-minute break, that was on him. If the crew sat around waiting for materials, that was just part of the day. Nobody was tracking that time, and nobody was paying for it separately.
Then the lawsuits started. Workers argued that under California law, they were entitled to paid rest periods — and that rolling those into the piece rate did not count. Courts agreed. The landmark case was Gonzalez v. Downtown LA Motors, and it blew the doors open. Suddenly, contractors across the state were staring at class action claims.
AB 1513 went into effect on January 1, 2016. It was the legislature's response. The law did not create new rights. It codified what the courts were already saying and spelled out exactly how employers must calculate and document the pay.
Here is what that looks like in practice.
The 3 Core Requirements of AB 1513
1. Rest and Recovery Periods Must Be Paid Separately
California law entitles most workers to a paid 10-minute rest break for every four hours worked (or major fraction thereof). Under AB 1513, you cannot just assume your piece rate covers those breaks. You must pay for them separately.
The rate you use is the "regular rate of compensation." Here is the formula:
Regular Rate = Total Piece Rate Earnings in the Pay Period / Total Hours Spent on Piece Rate Work
Important: the denominator is hours spent actually performing piece rate work — not total hours on the clock.
Worked Example
A roofer earns $1,200 in piece rate pay during a weekly pay period. He spent 32 hours performing piece rate work that week. He also took five 10-minute rest breaks (50 minutes total, or 0.83 hours).
- Regular rate: $1,200 / 32 hours = $37.50 per hour
- Rest period pay: 0.83 hours x $37.50 = $31.13
His total pay for the week includes the $1,200 in piece earnings plus $31.13 for rest periods. Those are two separate line items.
You do not subtract the rest period time from piece rate hours. The 32 hours is his productive piece rate time. The 0.83 hours is tracked and paid on top of that.
2. Nonproductive Time Must Be Compensated
"Other nonproductive time" is any time the worker is under your control but is not performing piece rate work and is not on a rest or recovery break. Think of it this way: if they are on the clock and you are telling them where to be, but they are not producing, that is nonproductive time.
Common examples in construction:
- Waiting for materials to arrive
- Travel time between job sites during the day
- Mandatory safety meetings or toolbox talks
- Setup and cleanup time that is not part of the piece rate task
- Waiting out weather delays when you have not sent the crew home
This time must be paid at no less than the applicable minimum wage. As of 2026, California's state minimum wage is $16.50 per hour, though some cities and counties set it higher. You can also choose to pay nonproductive time at the regular rate if that is higher, but minimum wage is the floor.
Worked Example
A drywall crew member earns $1,000 in piece rate pay over 30 hours of productive piece work during the week. He also spent 3 hours in safety meetings and 2 hours waiting for materials — 5 hours of nonproductive time total.
- Regular rate: $1,000 / 30 hours = $33.33 per hour
- Nonproductive time pay (at minimum wage): 5 hours x $16.50 = $82.50
Alternatively, if the employer pays nonproductive time at the regular rate: 5 hours x $33.33 = $166.65.
Either way, it must be tracked and paid separately from the piece rate earnings. It is not optional.
3. Itemized Wage Statements Must Break It All Down
AB 1513 amended California Labor Code Section 226 to require specific line items on every pay stub for piece rate workers. Your wage statement must separately show:
- Total hours of compensable rest and recovery periods and the rate paid
- Gross wages paid for rest and recovery periods
- Total hours of other nonproductive time and the rate paid
- Gross wages paid for other nonproductive time
This is on top of the standard California pay stub requirements (gross wages, total hours, deductions, pay period dates, etc.).
If you are still handing out pay stubs that just show one lump sum for "piece rate pay," you are out of compliance. Every pay period. For every worker.
What This Means for California Contractors
If you run roofing, drywall, framing, or any other trade crew on piece rate in California, AB 1513 changes how you manage your payroll. Here is the practical reality.
You need to track three types of time. Productive piece rate hours, rest and recovery time, and nonproductive time. That means your crew leads or foremen need a system for logging when workers are producing, when they are on break, and when they are waiting around. A clipboard can work. Software works better.
Your payroll gets more complex. You are not just multiplying squares by a rate anymore. You need to calculate the regular rate each pay period, compute rest period pay, compute nonproductive time pay, and then add it all together. If you also owe overtime, the math stacks up fast.
You cannot just inflate the piece rate to cover everything. Some contractors think they can set the piece rate high enough to "include" rest periods. That does not satisfy the law. The statute specifically requires separate compensation. Rolling it into the piece rate is the exact practice AB 1513 was written to stop.
Crew sizes make it worse. If you have 15 guys on piece rate, you have 15 sets of calculations every pay period. Miss one line item on one pay stub and that is a violation.
Penalties for Non-Compliance
California does not mess around with wage and hour violations. Here is what you are looking at if you get it wrong.
Itemized wage statement penalties (Labor Code Section 226.3): $50 for the first violation per employee, $100 for each subsequent violation per employee per pay period. Run a crew of 10 for six months with bad pay stubs and you are looking at thousands of dollars before anyone even files a lawsuit.
Waiting time penalties: If a worker quits or is fired and their final paycheck does not include proper rest period and nonproductive time pay, you owe waiting time penalties — up to 30 days of the worker's daily rate of pay.
PAGA claims: California's Private Attorneys General Act lets workers file claims on behalf of themselves and all other "aggrieved employees." One worker with a bad pay stub can bring a claim covering your entire crew. PAGA penalties are 75% to the state and 25% to the employees, but the legal fees to defend these claims can be devastating for a small contractor.
Liquidated damages: For minimum wage violations on nonproductive time, workers can recover liquidated damages equal to the amount of unpaid wages plus interest.
The bottom line: the penalties for getting this wrong almost always cost more than doing it right from the start.
How to Comply: A Practical Checklist
Here is what you need to do if you pay piece rate in California.
1. Audit your current payroll. Pull your most recent pay stubs. Do they separately list rest period pay and nonproductive time pay? If not, you have a problem right now.
2. Set up time tracking for all three categories. Every worker on piece rate needs to log productive piece rate hours, rest and recovery time, and nonproductive time. Use whatever system works for your operation, but it needs to be consistent and documented.
3. Calculate the regular rate each pay period. Total piece rate earnings divided by total hours of piece rate work. This rate will change every pay period. Do not use a flat rate or an estimate.
4. Pay rest periods at the regular rate. Multiply the regular rate by the total rest and recovery hours. This is a separate line item on the pay stub.
5. Pay nonproductive time at minimum wage or higher. Track every hour of nonproductive time and pay at least minimum wage. If you want to pay the regular rate instead, that is fine — just be consistent and document your policy.
6. Update your pay stubs. Make sure your payroll system can produce itemized wage statements that show all the required line items. If your current system cannot do this, switch to one that can.
7. Train your foremen. The people running your crews on-site need to understand what counts as nonproductive time and how to log it. If they do not track it, you cannot pay it, and that is a violation.
8. Keep records. California requires you to maintain payroll records for at least three years. Keep your time tracking logs alongside your payroll records.
9. Review your piece rate structure. Make sure your rates still make financial sense once you factor in the additional rest period and nonproductive time pay. You may need to adjust your job pricing to account for the true labor cost.
Frequently Asked Questions
Does AB 1513 apply to independent contractors?
No. AB 1513 applies to employees paid on a piece rate basis. However, California has strict rules about worker classification under AB 5 and the ABC test. If your "independent contractors" are actually employees under California law, AB 1513 applies to them. Misclassification will not protect you — it will make things worse.
Can I pay a flat hourly rate for rest periods instead of calculating the regular rate?
You can pay the regular rate or a rate no less than the applicable minimum wage for rest and recovery periods. Most employers calculate the regular rate because it is usually higher than minimum wage for skilled trade workers, and paying minimum wage for rest periods when the regular rate is significantly higher could invite scrutiny. The safest approach is to use the regular rate formula spelled out in the statute.
What if a worker skips their rest break voluntarily?
California law says you must authorize and permit rest breaks. You cannot prevent or discourage workers from taking them. If a worker voluntarily skips a break with no pressure from you, you may not owe rest period pay for that specific break — but you still need to document that the break was offered. In practice, the burden of proof is on you to show the break was genuinely voluntary. Most employment attorneys will tell you it is safer to schedule the breaks and pay for them.
Does this apply to piece rate workers who also earn an hourly base?
AB 1513 applies when employees are paid on a "piece-rate basis." If you pay a guaranteed hourly base plus piece rate incentives, the analysis gets more complicated. The hourly base may already cover rest periods and nonproductive time, depending on how it is structured. Consult a California employment attorney to review your specific pay structure.
How does AB 1513 interact with overtime?
They stack. You still owe overtime under California law (daily overtime after 8 hours, weekly overtime after 40 hours). The regular rate for overtime purposes must include piece rate earnings, rest period pay, and nonproductive time pay. This makes the overtime calculation more involved. We cover the step-by-step overtime math in our overtime guide for piece rate workers.
Stay Compliant Without the Headache
AB 1513 is not going away. If you run piece rate crews in California, compliance is part of your operating cost. The good news is that once you set up the right systems, it becomes routine.
The hard part is the first payroll cycle — getting your time tracking in place, updating your pay stubs, and making sure the math is right. After that, it is just process.
Try our free California Piece Rate Guide for a complete breakdown of California's rules — no signup required.