IN THE SUPREME COURT OF THE STATE OF WASHINGTON
CERTIFICATION FROM THE ) UNITED STATES DISTRICT ) No. 90932-6 COURT FOR THE WESTERN ) DISTRICT OF WASHINGTON ) IN ) ENBANC ) ANA LOPEZ DEMETRIO and ) FRANCISCO EUGNIO PAZ, ) ) Plaintiffs, ) ) v. ) ) SAKUMA BROTHERS FARMS, ) Filed JUL 1 6 2015 INC., ) ) Defendant. ) _____________________ ) Yu, J.- We have been asked to answer two certified questions arising from
a class action employment lawsuit pending in federal district court. Washington
labor regulations allow employees to take short rest breaks "on the employer's time."
When applied to employees paid by the hour, that means employers must pay
employees their regular hourly rate during these brief periods of inactivity. Hourly Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
employees, in other words, remain "on the clock" during breaks under undisputed
Washington law.
To answer the certified questions here, we must interpret "on the employer's
time" and apply the language to agricultural employees who are not paid by the hour
but rather by the piece. A piece rate is tied to the employee's output (for example,
per pound of fruit harvested) and is earned only when the employee is actively
producing. Thus for employees paid a piece rate, the clock stops during periods of
inactivity however brief. The central issue is whether employers can fold payment
for rest breaks, when the clock is stopped, into the piece rate consistently with the
mandate that breaks be paid "on the employer's time." This phrase appears in the
regulation applicable to agricultural employees:
Every employee shall be allowed a rest period of at least ten minutes, on the employer's time, in each four-hour period of employment. For purposes of computing the minimum wage on a piecework basis, the time allotted an employee for rest periods shall be included in the number of hours for which the minimum wage must be paid. WAC 296-131-020(2) (emphasis added).
We rely on the plain language of that regulation to conclude that employers
must pay employees for rest breaks separate and apart from the piece rate. An all-
inclusive piece rate compensates employees for rest breaks by deducting pay from
the wages the employee has accumulated that day. Hourly employees do not finance
their own rest breaks in this way, and requiring pieceworkers to do so strips the
2 Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
phrase "on the employer's time" of any practical meaning. That same language
requires that rest breaks for pieceworkers be paid at least at the applicable minimum
wage or the employee's regular rate, whichever is greater.
BACKGROUND
This case began in 2013 when two workers sued Sakuma Brothers Farms Inc.
in federal district court on behalf of all seasonal and migrant agricultural workers
Sakuma employs (Workers). Sakuma operates a berry farm in Skagit County and
hires hundreds of migrant and seasonal workers to harvest its crop each year. These
Workers, many of whom speak little English, travel to the Skagit Valley to handpick
Sakuma's strawberries, blackberries, and blueberries. For that work, Sakuma pays
a "piece rate" wage based on the Workers' productivity-e.g., an amount per pound
or per box of fruit harvested. The piece rate is the only compensation the Workers
receive. As a Sakuma representative testified, "[I]f the picker is not picking ... , the
picker is not earning money." Doc. 33, at 7 (Decl. of Marc C. Cote in Supp. of Mot.
To Certify Legal Questions to Wash. Supreme Ct.).
The Workers' class action lawsuit asserted several state and federal claims
arising from Sakuma's use of piece rate wages. In the only claim relevant here, the
Workers allege that Sakuma deprived them of paid rest breaks required by WAC
296-131-020(2), which provides that "[e]very employee shall be allowed a rest
period of at least ten minutes, on the employer's time, in each four-hour period of
3 Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
employment." (Emphasis added.) The Workers contend "on the employer's time"
means that Sakuma must pay a wage separate from the piece rate for the 10-minute
period they are on break, since no piece rate wages accumulate during that time.
Sakuma responds that it sets the piece rate with rest periods in mind and that breaks
are therefore "on the employer's time" as regulated.
While the case was pending in federal court and after some discovery, Sakuma
agreed to settle each of the Workers' retroactive claims. But Sakuma denied liability
and expressly preserved its challenge to the Workers' prospective claim that
"Sakuma must pay for the time piece rate workers spend in rest breaks under WAC
296-131-020(2)." Doc. 27, at 17 (Stipulation of Settlement & Release between
P1s. & Def.). Thus the settlement does not affect the Workers' claim for declaratory
relief requiring pay separate and apart from the piece rate for these brief rest periods
going forward. The federal district court granted the Workers' motion to certify to
us two questions related to that claim.
CERTIFIED QUESTIONS
1. Does a Washington agricultural employer have an obligation under WAC 296-131-020(2) and/or the Washington Minimum Wage Act [(MWA), ch. 49.46 RCW,] to separately pay piece-rate workers for the rest breaks to which they are entitled? 2. If the answer is "yes," how must Washington agricultural employers calculate the rate of pay for the rest break time to which piece-rate workers are entitled?
4 Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
Doc. 44, at 1-2 (Order Granting in Part Stipulated Mot. regarding Certified
Questions to Wash. Supreme Ct.).
ANALYSIS
We answer certified questions de novo and in light of the federal court record.
Frias v. Asset Foreclosure Servs., Inc., 181 Wn.2d 412, 420, 334 P.3d 529 (2014).
First Certified Question
Though Sakuma and the Workers dispute the resolution of the first certified
question-whether pay separate from the piece rate is owed to pieceworkers for rest
breaks-they agree on several points. They agree that employers must provide rest
breaks to agricultural employees. They agree that agricultural employees are entitled
to some form of payment for those breaks. And, guiding the analysis here, they
agree that to answer the question we must interpret WAC 296-131-020. The
Department of Labor and Industries adopted that regulation in 1990, yet in 25 years
no Washington court has defined its scope or applied it to workers paid by piece rate.
We interpret regulations using the same rules we use to interpret statutes.
First, we examine the plain language of the regulation; if that language is
unambiguous it controls. Silverstreak, Inc. v. Dep 't of Labor & Indus., 159 Wn.2d
868, 881, 154 P.3d 891 (2007). Language is unambiguous if it has only one
reasonable interpretation. Cerrillo v. Esparza, 158 Wn.2d 194, 201, 142 P.3d 155
5 Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
(2006). The regulation at issue, WAC 296-131-020(2), applies only to agricultural
employees and provides:
Every employee shall be allowed a rest period of at least ten minutes, on the employer's time, in each four-hour period of employment. For purposes of computing the minimum wage on a piecework basis, the time allotted an employee for rest periods shall be included in the number of hours for which the minimum wage must be paid. The focus of most of the parties' and amici's attention is on the meaning of
"on the employer's time." The plain and ordinary meaning of this phrase is clear:
employers must pay agricultural employees during their 10-minute breaks. And
when applied to pieceworkers, the only reasonable interpretation is that "on the
employer's time" requires pay separate from the piece rate. Since the piece rate is
earned only while the employee is working (i.e., no pay accrues during rest breaks)
the Workers' rest breaks cannot reasonably be said to be "on the employer's time"
if paid by the piece. The only way to give meaning to the phrase in this context is
to require compensation separate from the piece rate for rest breaks. While
Sakuma's suggestion that WAC 296-131-020(2) allows an all-inclusive piece rate is
perhaps a conceivable interpretation of the regulation, it is not a reasonable one.
Cerrillo, 158 Wn.2d at 201 (holding, "'a statute is not ambiguous merely because
different interpretations are conceivable"' (internal quotation marks omitted)
(quoting Agrilink Foods, Inc. v. Dep't of Revenue, 153 Wn.2d 392, 396, 103 P.3d
1226 (2005))).
6 Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
Yet even if WAC 296-131-020(2) were ambiguous, we resolve ambiguities in
ways that "further, not frustrate, the[] intended purpose" of the regulation. Bostain
v. Food Express, Inc., 159 Wn.2d 700, 712, 153 P.3d 846 (2007) (quoting Burnside
v. Simpson Paper Co., 123 Wn.2d 93, 99, 864 P.3d 937 (1994)). Sakuma's
interpretation permitting an all-inclusive piece rate conflicts with over a decade of
case law interpreting a similar rest break regulation.
We have previously considered the phrase "on the employer's time" as it
appears in a different regulation. Rest breaks for nonagricultural employees are
governed by WAC 296-126-092, which also "allow[ s] a rest period of not less than
ten minutes, on the employer's time, for each four hours of working time." WAC
296-126-092( 4). The Department expressly patterned WAC 296-131-020(2)' s rest
break provision for agricultural employees on WAC 296-126-092(4).
Since WAC 296-131-020(2) was patterned on WAC 296-126-092(4), our
previous interpretations of the latter regulation are useful. We first interpreted WAC
296-126-092(4) and "on the employer's time" in Wingert v. Yellow Freight Systems,
Inc., 146 Wn.2d 841, 50 P.3d 256 (2002). There we applied the regulation to a
collective bargaining agreement that provided a 15-minute break after two hours of
overtime work. If employees worked less than two hours of overtime, they received
no break. At issue was the employer's practice of excusing employees just before
7 Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
two hours of overtime, requiring those employees to work continuously nearly four
hours between their afternoon break and the end of their workday. Id. at 845-46.
We held WAC 296-126-092 prohibited employees from working three hours
uninterrupted without a break, 1 even if the employee was receiving overtime pay and
notwithstanding a conflicting break provision in the employees' collective
bargaining agreement. The employer's alternate accommodation-overtime pay
and a different break schedule-was not a substitute for the policy advanced by the
rest break regulation, namely that "employees [are] afforded healthy working
conditions and adequate wages." Id. at 852. Any practice that "decrease[s] the
frequency of worker's rest periods ... thwart[s] that fundamental purpose." Id.
Ten years after Wingert, we again interpreted WAC 296-126-092(4) in a way
that protected workers' rights. Wash. State Nurses Ass 'n v. Sacred Heart Med.
Center, 175 Wn.2d 822, 287 P.3d 516 (2012). The employer in that case often
required employees to work through rest breaks during their eight-hour shifts.
Although the employer would pay employees for missed rest breaks, it did not pay
overtime, since the employees were never on the employer's premises for more than
eight hours. Citing WAC 296-126-092( 4), the MWA and "considerations of
employee health," we required the employer to compensate missed rest breaks at the
1 WAC 296-126-092(4) provides, "Employees shall be allowed a rest period of not less than ten minutes, on the employer's time, for each four hours of working time .... No employee shall be required to work more than three hours without a rest period."
8 Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
overtime rate. Id. at 832. We reasoned that any other interpretation created an
economic incentive for employers to encourage employees to skip breaks, a result
contrary to the intent of WAC 296-126-092 and the MWA.Id.
The Court of Appeals has similarly interpreted WAC 296-126-092(4) to
protect the effectiveness of rest breaks. Specifically, Division One held that the
regulation "imposes a mandatory obligation on the employer" to provide a paid rest
break "'on the employer's time."' Pellino v. Brink's Inc., 164 Wn. App. 668, 688,
267 P.3d 383 (2011) (quoting WAC 296-126-092(4)). It is not enough for an
employer to simply schedule time throughout the day during which an employee can
take a break if he or she chooses. Instead, employers must affirmatively promote
meaningful break time.Id. at 691 (quoting White v. Salvation Army, 118 Wn. App.
272, 283, 75 P.3d 990 (2003)). A workplace culture that encourages employees to
skip breaks violates WAC 296-126-092 because it deprives employees of the benefit
of a rest break "on the employer's time." Id. at 679.
Although these three cases-Wingert, Sacred Heart, and Pellino-applied
rest breaks paid "on the employer's time" to hourly workers, they guide our analysis.
More than establishing blanket rules, each of those courts looked to the purpose rest
breaks serve in light of how rest breaks were used (or not) by the employees in
context. Both parties here agree that rest breaks are critical to the health and
effectiveness of employees, especially those working long hours outside. Amicus
9 Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
reports that agriculture is one of the most dangerous industries in America, inflicting
its workers with high rates of repetitive and environmental injuries. Rest breaks
mitigate these dangers by allowing employees to sit, cool down, and rehydrate, and
we interpret rest break regulations to further that recuperative purpose. Wingert, for
example, held that employees cannot bargain away time for rest, even in exchange
for additional pay. And Sacred Heart and Pellino reject payment schemes that
incentivize missed rest breaks at the expense of the employee's health.
Those principles support interpreting "on the employer's time" in WAC 296-
131-020(2) to require rest break pay separate from the piece rate. Sakuma argues
WAC 296-131-020(2) permits an all-inclusive piece rate because "the system
incentivizes employees by awarding harder-working and more productiye workers
with greater earnings." Sakuma Bros. Farms, Inc.'s Resp. Br. on Certified Questions
at 25-26. This appears a tacit admission that the current piece rate scheme
encourages employees to "work harder" by skipping breaks. That result conflicts
with all three of the cases discussed above: it effectively decreases the frequency of
employees' rest periods; it incentivizes Sakuma to employ fewer employees; and it
fosters a culture of working through breaks. See Wingert, 146 Wn.2d at 852; Sacred
Heart, 175 Wn.2d at 832; Pellino, 164 Wn. App. at 679. Sakuma's interpretation is
not only inconsistent with the plain language of WAC 296-131-020(2), it is contrary
to the regulation's basic purpose.
10 Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
In sum, we answer the first certified question yes. Following from the plain
language of WAC 296-131-020(2), and consistent with case law interpreting
Washington's long-standing labor policy, employers must pay a wage separate from
the piece rate for time spent on rest breaks. Given the posture of this case and the
settlement agreement releasing the Workers' claims for retrospective relief, we take
no position on the retroactivity of this rule. See Ruiz-Guzman v. Amvac Chern. Corp.,
141 Wn.2d 493, 508, 7 P.3d 795 (2000) ("In answering federal certified questions,
we do not seek to make broad statements outside of the narrow questions and record
before us.").
Second Certified Question
Next the federal district court asks us how "Washington agricultural
employers calculate the rate of pay for the rest break time" for pieceworkers. Doc.
44, at 2 (Order Granting in Part Stipulated Mot. regarding Certified Questions to
Wash. Supreme Ct.). The parties differ in their proposed answers to this question.
The Workers argue for the employee's average piece rate earnings. They would
have employers convert the piece rate by dividing the employee's weekly piece rate
earnings by the number of hours the employee worked, exclusive of rest break time,
and pay rest breaks at that de facto hourly rate (the employee's "regular rate").
Sakuma argues Washington law requires only the minimum wage per hour for
pieceworkers, though it admits paying rest breaks for its hourly employees at the
11 Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
employees' hourly rate.
WAC 296-131-020(2) is silent about the rate of pay required for employee
rest breaks, whether paid by the piece or otherwise. Of course the starting point for
the calculation is the applicable minimum wage. The MWA "sets the floor below
which the agreed rate cannot fall without violating the statute." Seattle Prof'l Eng 'g
Emps. Ass 'n v. Boeing Co., 139 Wn.2d 824, 835, 991 P.2d 1126, 1 P.3d 578 (2000)
(SPEEA) (citing ch. 49.46 RCW). 2 The second sentence of WAC 296-131-020(2)
references the MWA's floor by ensuring the quotient of an employee's piece rate
earnings by the number of hours he or she worked, inclusive of the time spent on
rest breaks, is at least the minimum wage. 3 If this de facto hourly rate falls below
2 Sakuma cites SPEEA to argue that separate pay for rest breaks is capped at the minimum wage. But SPEEA is a case about contracts, not regulatory interpretation, and it has little application here. There an employer required new employees to attend unpaid preemployment orientation sessions. This practice was embodied in written employment contracts in which employees agreed (1) that their attendance at orientation would be unpaid, and (2) that the terms of employment, including salary, would begin after orientation. The employees sued, arguing they were owed wages for attending these orientations, paid as a pro rata portion of their contractual salary. SPEEA, 139 Wn.2d at 833-34. We agreed wages were due but limited the employees' recovery to the minimum wage based on the employment contracts they signed. Those contracts "contain[ed] fixed starting dates for employment that excluded the mandatory preemployment orientation sessions," and under their terms the employees were owed their salaries only after orientation. Id. at 833. Since we lack authority to rewrite contracts, we held the contracts expressly prohibited the remedy the employees sought. Id. at 833-34. We therefore fell back to the MWA as the measure of damages. There are no contradictory written contracts in the record before us. Thus SPEEA applies in this instance only for the uncontested proposition that employers must pay at least the minimum wage. The minimum wage is a floor, not a ceiling. That is why the minimum wage is only a starting point when construing what WAC 296-131-020(2) requires. 3 An example demonstrates this calculation in practice. Suppose an employee is paid 50 cents per pound of fruit picked (the piece rate). The employee works five eight-hour days and takes 20 minutes of rest breaks each day, as provided by WAC 296-131-020(2). The employee
12 Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
the minimum wage, the employer must bring up the employee's pay to the minimum.
Like every employer of piece rate workers, Sakuma already performs this minimum
wage calculation.
As discussed earlier, however, a pieceworker's right to separate pay for rest
breaks springs not from the MWA but rather from WAC 296-131-020(2)' s mandate
that rest breaks be paid "on the employer's time." That phrase also appears in the
nonagricultural rest break regulation, which we have consistently found to require
equal treatment of every hour worked. For instance, we found no distinction
"between regular and overtime hours worked" and held employees were entitled to
rest breaks "on the employer's time" if they worked ''regular hours, overtime hours,
or a combination of both." Wingert, 146 Wn.2d at 848 (citing WAC 296-126-
092(4)). We also recognized that "rest periods constitute 'hours worked'" and held
that for the purposes of computing overtime, hours spent resting are treated the same
as hours spent working. Sacred Heart, 175 Wn.2d at 831. In other words, under
WAC 296-126-092( 4) all hours worked contribute equally to the employee's right
to a rest break and there is no basis to treat the rate paid for rest breaks "on the
employer's time" differently from the rate paid for other hours worked.
has spent 38.6 hours producing and 1.4 hours on breaks, for 40 hours of total work. If the employee produces 750 pounds of fruit, he or she earns $375.00 that week. Thus, the employer divides the employee's total piece rate earnings ($375.00) by 40 hours, which equals only $9.38 per hour. The employer must increase the worker's total piece rate earnings to meet the $9.47 state minimum wage, if that is the highest applicable minimum wage in the locality.
13 Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
Nothing in WAC 296-131-020(2) suggests "on the employer's time" means
something different to agricultural workers generally or to pieceworkers specifically.
In fact, the regulation is entirely consistent with our prior interpretations of "on the
employer's time" when a pieceworker's average earnings are less than or equal to
the minimum wage. Time spent on rest breaks and time spent in active work are
both hours worked for the employer and, under the second sentence of WAC 296-
131-020(2), are paid at the same rate (the minimum wage). We find no reason to
depart from this interpretation when a pieceworker's average earnings are more than
the minimum wage. Paying pieceworkers only the minimum wage for rest breaks
and a higher rate for active labor results in the same parsing of hours worked "on the
employer's time" that we rejected in Wingert and Sacred Heart.
Because all hours worked "on the employer's time" are treated equally, we
hold that WAC 296-131-020(2) entitles pieceworkers to their regular rate of pay for
rest break time. To calculate a pieceworker's regular rate, employers again tally the
total piece rate earnings and divide those earnings by the hours the pieceworker
worked, but here the divisor excludes time spent resting. 4 This formula results in
the average rate of pay pieceworkers earn during active production (i.e., their regular
rate) and prevents rest break time from being double counted. It is also the formula
4 In the previous example, the employee's regular rate is $9.72 per hour that pay period. This results from dividing $375.00 (total piece rate earnings) by 38.6 hours (total hours in active production, exclusive ofbreak time).
14 Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
that Sakuma uses to pay pieceworkers for missed rest breaks, since "it is time [the
employees] have already spent" working. Wash. Supreme Court oral argument,
Demetrio v. Sakuma Bros. Farms, No. 90932-6 (Mar. 17, 2015), at 34 min., 26 sec.,
audio recording by TVW, Washington State's Public Affairs Network, available at
http://www.tvw.org.
We agree with Sakuma that missed breaks must be compensated at the
pieceworker's regular rate. And we see no reason to treat missed rest breaks
differently from rest breaks provided. The pieceworker's right to a paid break-
whether taken or not-follows from the same regulatory language: "on the
employer's time." It would be inconsistent to interpret that phrase to mean payment
at the employee's regular rate in one instance and merely the minimum wage in
another. Consistency is especially important here to ensure efficient employees are
not penalized for taking rest breaks. If rest breaks are compensated at a lower wage
than the pieceworker's regular rate, there is a strong incentive to miss rest breaks.
That result frustrates the entire purpose of WAC 296-131-020(2). See Sacred Heart,
175 Wn.2d at 832.
Thus we answer the second certified question: WAC 296-131-020(2) requires
that rest break time be compensated at the pieceworker's regular rate ofpay. 5
5 We recognize that the rate at which rest breaks are paid might be the subject of voluntary bargaining between an employer and employee, and this opinion does not impair the ability of
15 Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
CONCLUSION
We answer the first certified question yes. Pay for rest breaks separate from
the piece rate follows from the plain language of WAC 296-131-020(2) and is
consistent with Washington case law interpreting rest break regulations. We answer
the second certified question: in the absence of a separate agreement, pay separate
from the piece rate must equal at least the applicable minimum wage or the
pieceworker's regular rate of pay, whichever is greater. The Workers' attorney fee
request should be directed to the federal district court if that court enters a judgment
in their favor, and therefore the request is denied without prejudice.
parties to contract within the scope of the law. For example, it is conceivable that an employer and employee could agree to rest break pay at a higher rate than the employee's regular rate.
16 Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6
WE CONCUR:
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