The Curious Case Of Minimum Wage And A 6-Figure Employee

Law360, New York (March 9, 2015, 11:52 AM EDT) -- Astute entrepreneurs all over the country have found that pegging an employee's compensation to their productivity generally creates a win-win situation for both employer and employee. This form of compensation is known as piece-rate compensation when employees are compensated at an agreed upon amount for each task they complete.

However, piece-rate compensation, like all other forms of compensation, is subject to both state and federal minimum wage laws. Under the Fair Labor Standards Act, employers who compensate their employees on a piece-rate basis may use an "averaging" method to meet their federal minimum wage obligations. But California law, unlike its federal...

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