Piece Rate Employees

Atlanta overtime attorneys, Martin & Martin, represent employees in recovering their unpaid overtime. Atlanta overtime attorneys, Kimberly Martin and Tom Martin, fight in the best interests of their clients in recovering unpaid overtime wages that are owed to their clients. The calculation of overtime is dependent on how an employer compensates an employee. Typically, employers compensate employees on an hourly basis, salary basis, hourly plus tips, or commissions basis. However, in some industries like manufacturing, construction, auto repair, and agriculture, there is another pay basis that employers may choose to use. It is called the piece rate pay system and, Kimberly Martin and Tom Martin represent employees who are paid on a piece rate pay system and owed overtime wages.

Under a piece rate pay system, employers pay employees for the number of units produced or services rendered. Sample piece rate pay systems include:

1. Pay Employee Per Unit Produced;
2. Pay Employee Per X Number of Units Produced; or
3. Pay Employee an Hourly Wage Plus Per Unit Produced.

Regardless of which version of the piece rate pay system that an employer uses, the calculated hourly rate must always equal at least minimum wage as required by the federal Fair Labor Standards Act (FLSA). The FLSA also requires employers paying employees on a piece rate basis to pay the employees time and one-half for all hours over 40 in a given workweek. There are two ways to calculate overtime under the piece rate pay system.

The first way involves determining the regular hourly rate and then multiplying it by 0.5 for the overtime rate:

1. Multiple the number of units by the flat rate pay;
2. Divide this number by the total number of hours worked;
3. This equals the employee’s regular hourly rate;
4. Multiply the employee’s regular hourly rate by 0.5;
5. This equals the employee’s overtime rate;
6. Multiple the overtime rate by the number of overtime hours; and
7. This is the amount of overtime due to the employee.

The second way to calculate a piece rate pay worker’s overtime involves an agreement between the employee and employer whereby the employer agrees to compensate the employee 1.5 x the units produced during overtime hours. For example, if an employer compensates a piece rate pay worker $10 per unit produced. The employee’s pay must be 1.5x that ($15) per unit that is produced during the overtime hours (hours over 40 in a given workweek).

If an employee successfully recovers unpaid overtime from their employer, the Court will also order that the employer pay the employee a type of damages called liquidated damages also known as “double damages.” This means that if a piece rate pay employee’s total owed overtime equals $7,000, the Court will order the employer to pay an additional amount of $7,000 in liquidated damages. Plus, the Court will order the employer to pay the employee’s attorney’s fees and litigation costs.

1. When you calculate your regular hourly rate (total pay by total number of hours worked), is it at least minimum wage;
2. Have you worked more than 40 hours in any given workweek within the last three years? (Remember to count all hours worked, including work “off the clock,” “on call,” etc.); and
3. During the weeks you worked more than 40 hours, were you paid overtime by receiving 0.5 x your regular hourly rate for all hours over 40 or were you paid based on an agreement with your employer whereby you receive 1.5 x the number of units produced during all overtime hours?

Piece rate pay systems can cause confusion on how to calculate overtime. If you have any questions about a piece rate pay system, Atlanta overtime attorneys Tom Martin and Kimberly Martin, offer free confidential consultations and they are usually available to consult with you on the same day. Piece rate overtime attorneys at Martin & Martin will walk through your wages and hours and determine whether you are entitled to unpaid overtime and if so, how much overtime your employer owes you. You can contact Kimberly Martin and Tom Martin at Contact Us or call the firm directly. For more information about the FLSA, check out the firm’s Overtime Blog and FLSA Frequently Asked Questions.