Piece Rate

Piece Rate or Piece Work Pay

Colorado Revised Statutes 8-4-101(8)(a) defines wages or compensation as "all amounts for labor or service performed by employees, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method..."Colorado Minimum Wage Order Number 29 provides the following:" All adult employees and emancipated minors, employed in any of the industries covered herein, whether employed on an hourly, piecework, commission, time, task, or other basis, shall be paid not less than $7.78 per hour..."

Piece Rate Definition

Piece rate work (also referred to as piece work) may be viewed as work paid for according to the number of units or products completed or produced. Piece rate plans may be determined by one individual's work, or can also include a group of employees who share compensation based upon group completion of required tasks or products.

Piece rate pay can apply to many situations, and common examples of piece rate pay include:

A technician paid by the number of telephone lines installed
A mechanic paid per tune-up completed
A factory worker paid for each widget assembled

For employees covered under Colorado Minimum Wage Order Number 29, piece rate pay methods are allowed if the following conditions are met:

The employee's total weekly compensation must meet or exceed the minimum wage for all hours during which the employee was subject to the control of the employer, including all the time the employee was suffered or permitted to work, whether or not required to do so, for the entire workweek.
Overtime pay may be calculated using one of the following two methods:
- The regular rate of pay is determined on a weekly basis by the amount of pieces completed. As piece rate production may vary per week, the overtime pay rate will vary accordingly. For overtime, in addition to the total weekly earnings, piece workers are entitled to a sum equivalent to one-half the regular rate of pay multiplied by the number of overtime hours worked. Only this additional halftime
- pay is required, as the employee has already received straight time compensation at piece rates for all hours worked.
- Overtime pay is computed at piece rates not less than one and one-half times the piece rates applicable to the same work when performed during non-overtime hours.

References

Advisory Bulletin: Piece Rate or Piece Work Pay, 18(I)
Colorado Revised Statutes 8-4-101(8)(a) (Definitions)
Colorado Minimum Wage Order Number 29
29 Code of Federal Regulations 778.111 (Pieceworker)
29 Code of Federal Regulations 778.418 (Pieceworkers)