Piece rate pay
Piece rate pay is a set amount per unit of work completed, such as each item assembled or delivery made, rather than per hour.
- LAW
- FLSA §§6-7; 29 CFR 778.111
- BOUNDARY
- The workweek, for minimum wage and overtime
- FORMULA
- The week’s includable pay ÷ all hours worked
- WATCH FOR
- Paying piece earnings without tracking hours worked
You still track hours under piece rate pay. Federal and state wage law requires piece earnings to meet the minimum wageMinimum wage. Minimum wage is the lowest hourly rate you may legally pay a covered employee, set by federal, state, and sometimes local law.Click to open the term for every hour worked. Overtime applies too, on a regular rate you rebuild each workweekWorkweek (FLSA). A workweek under the Fair Labor Standards Act is a fixed, regularly recurring period of 168 consecutive hours used to compute overtime.Click to open the term from piece earnings and other includable pay. Many piece jobs also mix in hourly tasks, typically paid separately, such as a mandatory meeting or waiting for materials.
How is piece rate pay calculated?
A piece rate is set per completed unit, such as each yard of carpet installed, garment sewn, or order packed. Pay for a period is the piece rate times the units completed. The rate does not automatically account for slow periods, equipment downtime, or training time. So each week you compare piece earnings with the minimum wage for the hours actually worked. When earnings fall short, you pay the difference as a supplement.
How does overtime work under piece rate pay?
Mixed weeks of piece and hourly tasks still produce one weighted regular rate for the whole workweek. Many agricultural employees and interstate truck drivers are exempt from federal overtime, while minimum wage generally still applies. State law can add its own overtime rules. Confirm which method applies with the U.S. Department of Labor or a wage and hour professional.
- 01
Total the week’s earnings: piece earnings plus hourly pay, waiting time, and nondiscretionary bonuses.
- 02
Divide by total hours worked to find the regular rate.
- 03
Generally add half of the regular rate for each hour over 40, since piece and hourly pay already cover straight time for every hour, including overtime hours.
What does a 50-hour piece rate week pay?
Federal rules work this 50-hour week (29 CFR 778.111). The $523 of straight-time pay divided by 50 hours gives a $10.46 regular rate. The total equals 40 hours at $10.46 plus 10 hours at $15.69.
| PAY | HOURS | AMOUNT |
|---|---|---|
| Piece earnings | 46 productive | $491.00 |
| Waiting time at $8.00 | 4 | $32.00 |
| Half-time premium at $5.23 | 10 over 40 | $52.30 |
| Total for the week | 50 | $575.30 |
Frequently asked
- 29 U.S.C. §206, Minimum wage
- 29 U.S.C. §207, Maximum hours
- 29 CFR 778.111, Pieceworker
- 29 CFR 778.418, Pieceworkers
General information, not legal or tax advice. Apply current federal and state rules with qualified guidance.