Is Your Boss Paying You Correctly Under a Piece Rate Wage Plan?
Piece-rate employees must be paid separately for work that does not fall within the scope of the work that is the subject of the piece rate.
So, if you’re a brake mechanic and are paid by the brake job (or other repair), but also clean the shop, make appointments, open/close the shop or any other duties that are not related to the brake jobs themselves, you must be compensated for the extra work. The hours spent working on non-piece rate tasks must be paid at least at minimum wage.
For example, in one case, an auto dealership compensated its auto mechanics based on a “piece rate” system. For repairs, the company would pay the employees based on a standard period of time allowed for a repair (flag hours). The pay rate was significantly higher than minimum wage. So, if the job took longer than standard hours, there was enough wages to ensure the mechanic earned more than minimum wage.
But the mechanics spent significant time at work NOT performing repairs, such as in training, cleaning, etc. The dealership would calculate the total hours worked vs. the compensation it would pay for flag hours. If the pay rate fell below minimum wage, the dealership would make up the difference. The dealership did not pay a separate hourly rate for non-repair time that would not have been covered under the piece rate.