(a) Piece rates and supplements generally. When an employee is
employed on a piece-rate basis, his regular hourly rate of pay is
computed by adding together his total earnings for the workweek from
piece rates and all other sources (such as production bonuses) and any
sums paid for waiting time or other hours worked (except statutory
exclusions): This sum is then divided by the number of hours worked in
the week for which such compensation was paid, to yield the
pieceworker's ``regular rate'' for that week. For his overtime work the
piece-worker is entitled to be paid, in addition to his total weekly
earnings at this regular rate for all hours worked, a sum equivalent to
one-half this regular rate of pay multiplied by the number of hours
worked in excess of 40 in the week. (For an alternative method of
complying with the overtime requirements of the Act as far as
pieceworkers are concerned, see Sec. 778.418.) Only additional half-time
pay is required in such cases where the employee has already received
straight-time compensation at piece rates or by supplementary payments
for all hours worked. Thus, if the employee has worked 50 hours and has
earned $245.50 at piece rates for 46
hours of productive work and in addition has been compensated at $5.00
an hour for 4 hours of waiting time, his total compensation, $265.50
must be divided by his total hours of work, 50, to arrive at his regular
hourly rate of pay--$5.31. For the 10 hours of overtime the employee is
entitled to additional compensation of $26.55 (10 hours at $2.655). For
the week's work he is thus entitled to a total of $292.05 (which is
equivalent to 40 hours at $5.31 plus 10 overtime hours at $7.965).
(b) Piece rates with minimum hourly guarantee. In some cases an
employee is hired on a piece-rate basis coupled with a minimum hourly
guaranty. Where the total piece-rate earnings for the workweek fall
short of the amount that would be earned for the total hours of work at
the guaranteed rate, the employee is paid the difference. In such weeks
the employee is in fact paid at an hourly rate and the minimum hourly
guaranty which he was paid is his regular rate in that week. In the
example just given, if the employee was guaranteed $5.50 an hour for
productive working time, he would be paid $253 (46 x $5.50) for the 46
hours of productive work (instead of the $245.50 earned at piece rates).
In a week in which no waiting time was involved, he would be owed an
additional $2.75 (half time) for each of the 6 overtime hours worked, to
bring his total compensation up to $269.50 (46 hours at $5.50 plus 6
hours at $2.75 or 40 hours at $5.50 plus 6 hours at $8.25). If he is
paid at a different rate for waiting time, his regular rate is the
weighted average of the 2 hourly rates, as discussed in Sec. 778.115.
[46 FR 7309, Jan. 23, 1981]
