In a move to resolve controversies and lawsuits over compensating piece-rate workers, California passed an update to the Piece-rate legislation section of the Labor Code (AB1513), which went into effect January 2016. This piece of legislation has the potential to be a game-changer for massage professionals, especially those working for large clinics as a commission or contract employee.
Why could this have such a significant impact on massage therapists and compensation? Because California Bill 1513 has changed the rules on compensation for piece-rate workers. Now, most massage therapists are treated as commission workers—they get paid for the number of sessions they provide. The Labor Code of California defines these therapists as piece-work providers, not commission based providers.
According to the Labor Code:
Piece-rate is defined as pay “based upon an ascertainable figure paid for completing a particular task or making a particular piece of goods”—i.e. providing a massage session.
Commission employees are defined as anyone “involved principally in selling an product or service, not making the product or rendering the service, and their compensation must be a percent of the price of the product or service.”
Because therapists are rendering services and not just selling them, their work is considered “piece-rate.” This is very different than the industry’s definition, and especially different from the large franchises'and clinics' definition.
So, how is this a game changer for the profession?
Two major changes will occur in California, and since many franchises cross state lines, those changes may be implemented nationwide.
#1: All California salons and spas must track, report and pay their massage therapists for “non-productive" and “rest/recovery” time. This is when therapists are required to be at work, but are not actively servicing clients, including:
waiting time for next client to arrive
assisting at the front desk
on break and meals
In other words, every minute that service providers are on the premises and not with a client, must be tracked, reported and compensated at the minimum rate of California minimum wage.
#2: “Non-productive” and “rest/recovery” time must be compensated at a separate pay rate from rate paid for when services are rendered. It is no longer allowed for the employer to average the total dollars paid by the total hours worked. Previously, as long as the averaged hourly rate equaled at least minimum wage, it was all good. Now, the time must be compensated separately.
What this means for therapists in California, at the very least, is that their paychecks will be figured differently. For some, it may not mean much of a change, but for others it could make a big difference. What this means for salon, spa and franchise owners could also be big. It may change the rates they can pay therapists when also adding in “non-productive” and “rest/recovery” time pay.
It will be interesting to watch this develop and determine if this will impact the profession in other locations as well.