Piece workers and overtime
Pieceworkers are workers that are paid for each piece they produce. This is called payment on a piece rate basis. This type of pay is very common in factories or production lines or assembly lines in manufacturing plants. Pieceworkers can easily be underpaid. The most common underpayment error is failure to pay downtime and failure to pay additional overtime for hours over 40 in a week. These errors are both a violation of the FLSA.
Many pieceworkers show up for their shift and begin working only to have to wait for the assembly line to pick up or start. Other piece rate employees are forced to wait during the day. They clean their station or area and are required to wait by their employers for the line to pick up or start. These employees must be paid hourly for their downtime. The Department of Labor has provided the following example of how that pay should occur:
for example, if the employee has worked 50 hours and has earned $491 at piece rates for 46 hours of productive work and in addition has been compensated at $8.00 an hour for 4 hours of waiting time, the total compensation, $523.00, must be divided by the total hours of work, 50, to arrive at the regular hourly rate of pay—$10.46. For the 10 hours of overtime the employee is entitled to additional compensation of $52.30 (10 hours at $5.23). For the week’s work the employee is thus entitled to a total of $575.30 (which is equivalent to 40 hours at $10.46 plus 10 overtime hours at $15.69). (29 CFR 778.111)
This example illustrates that employees must be paid for waiting time. In the example they are properly paid $8.00 per hour for 4 hours. Failure to pay for this wait time is a clear but common violation.
If pieceworkers work over 40 hours in a week they must be paid for the time over 40 hours in addition to the per piece rate they are paid. The example above shows that they employer must weekly calculate the regular rate and pay for each hour worked over 40 in addition to the rate paid for the pieces produced.