What does it mean to be paid by the piece?

When employers decide they want to pay workers by piece rate (also known as piecework), they’re referring to pay based on number of units or pieces created rather than the number of hours worked. In other words, the more “pieces” an employee produces, the more the employee is paid.

What is a per-piece pay rate or piecework?

What Is a Per-Piece Pay Rate or Piecework? In per-piece pay structures, payment is based on the number of “pieces” of work that a worker completes. The worker is paid a monetary rate of a certain number of cents or dollars for each piece of work. What constitutes a “piece” worthy of the set rate is defined in advance.

When do you get paid by the piece?

A piece rate is where an employee gets paid by the piece. This means the employee gets a pay rate for the amount picked, packed, pruned or made. When piece rates are paid, they apply instead of the hourly or weekly pay rate. An employee can be hired to work a mix of piece rates and hourly rate shifts.

How much do you get paid for a piece of work?

The worker is paid a monetary rate of a certain number of cents or dollars for each piece of work. What constitutes a “piece” worthy of the set rate is defined in advance.

Is it legal to pay an employee per piece?

Employees who are paid per piece are not exempt from Fair Labor Standards Act laws. They are still legally entitled to minimum wage and overtime pay. 1

What do you need to know about piece work pay?

Piecework, or piece work pay, is paying an employee a fixed pay rate for each unit they produce. Piece rate pay is most common for a contractor employee. However, employees who are not contractors can be paid piecework pay, too.

How does an employer calculate piece rate pay?

Divide hours worked into the total piece rate pay, and then add the overtime premium (if any) to the excess number of hours worked. In addition, an employer using the piece rate pay system must still ensure that its employees are at least paid the minimum wage.

Is it legal to pay an employee by piece?

The Wage & Hour Division offers this alternative method of complying with overtime rules while paying by the “piece”: If you and your worker agree to this arrangement before the work is performed, you may pay 1.5 times the piece rate for each piece produced during the overtime hours.

Can a contractor get paid for piecework work?

However, employees who are not contractors can be paid piecework pay, too. Piecework rates typically depend on the job and product produced. Types of businesses that may offer piecework pay include: