Piece Rate

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Piece Rate or Piece Work Pay

Colorado Revised Statutes 8-4-101(14)(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 Overtime and Minimum Pay Standards Order (“COMPS Order”) #36 Rule 3.1 provides the following for covered employees: "[A]ll employees (with the exceptions detailed in Rule 3.3), whether employed on an hourly, piecework, commission, time, task, or other basis, shall be paid not less than $12.00 per hour, less any applicable lawful credits or exceptions noted, for all hours worked."

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 the COMPS Order, piece rate pay methods are allowed if the employee's total weekly compensation meets or exceeds 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 compensation for piece rate work is based on an hourly regular rate calculated from the employee's pay. 


References


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