Piece Rate Pay and Overtime

Piece-rate pay is based on output, not time: a set amount for each item, task, or unit completed. It is common in manufacturing, agriculture, delivery, and some trades. Hours still matter, because the regular rate and overtime are based on the hours you worked.

Piece earnings

Piece earnings = number of pieces × rate per piece

If you work on several items with different rates, add each one. 1,200 pieces at $0.40 is $480.00.

The regular rate

Under 29 CFR 778.111, a pieceworker’s regular rate is total earnings for the workweek, from piece rates and all other sources, divided by hours worked.

Regular rate = total weekly earnings ÷ hours worked

Overtime: the half-time premium

Piece earnings already pay you something for every hour, including the hours over 40. So the overtime still owed is one-half of the regular rate for each hour over 40.

Overtime premium = hours over 40 × regular rate × 0.5

Example: 1,200 pieces at $0.40 in 44 hours

1. Piece earnings: 1,200 × $0.40 = $480.00.
2. Regular rate: $480.00 ÷ 44 = $10.91 an hour.
3. Overtime premium: 4 × ($10.909 × 0.5) = $21.82.
4. Gross pay: $480.00 + $21.82 = $501.82.

The regulation itself gives an example of a worker with a $10.46 regular rate who works 50 hours: the extra half-time for 10 overtime hours is $52.30.

Minimum wage still applies

Covered piece-rate workers must receive at least the applicable minimum wage for all hours worked. Divide your weekly earnings by your hours to find your effective hourly rate, and compare it with the minimum wage where you work. Some states set additional rules for piece work.

Tools

• Piece rate calculator: several items, other earnings, regular rate, and overtime premium.
• Overtime calculator: overtime for a single hourly rate.

Sources

• 29 CFR 778.111, Pieceworker (Cornell Legal Information Institute)
• U.S. Department of Labor, Fact Sheet #56A: Overview of the Regular Rate of Pay Under the FLSA