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You may be entitled to overtime pay even though you are paid on the basis of a piece rate. Yes, piece rate employees are still entitled to overtime pay.<\/p>\n
Piece rate, flag rate and book rate are all different names for being paid for units of completed work. Sometimes employers make this really confusing and refer to it as commission, even though you are not selling anything. The most common job titles that are paid this way are mechanics and cable TV installers. They are paid a specific rate for doing a particular job, regardless of the actual time it takes them to complete the work. Basically what takes place is that the employer estimates it should take 2 hours to change the oil on a large truck. So they will pay that mechanic 2 hours, or units, of work for that job even if he can complete that work in less time; or even if it takes him longer. The price per unit or per hour for piece rate can be anywhere from just a few cents to hundreds of dollars. There are no restrictions on how much the employer wants to pay for piece rate.<\/p>\n
The law requires employers to track the employees’ actual hours because if their piece rate is not equal to or more than what they would have been paid at minimum wage, including overtime pay, then the employer must be sure to pay them at minimum wage instead of the lesser piece rate amount.<\/p>\n
For instance: the cable installer worked 60 hours this week in 6 days, that\u2019s 10 hours a day and his piece rate amount was $545. However, this amount is less than what he would have been paid at minimum wage. Currently, minimum wage is $8.00 an hour, multiplied by 40 hours is $320, and overtime rate is calculated by multiplying the regular rate of pay by 1.5. In this case it is $12 an hour. So $12 multiplied by the remaining 20 hours of overtime is $240. All together at minimum wage he should be paid $560.<\/p>\n
Keep in mind, double time occurs in California after 12 hours in a day, so this too should be taken into account.<\/p>\n
So to reiterate: even if you are paid piece rate wages, you must make as much or more than what you would have made at minimum wage. Also, if your piece rate is the higher amount you are still entitled to overtime!<\/p>\n
To find your overtime rate you must take the total amount of piece rate pay, divide it by the total amount of hours worked, and multiply it by 1.5, then multiply that by the number of overtime hours worked.<\/p>\n