A piece rate fixes a wage payment on each completed unit of work. When a
worker with a disability is to perform a production job, the simplest and most
objective method to ensure the payment of commensurate wages is the payment of
a piece rate.
If the prevailing wage survey yielded a piece rate, and the employer of
the workers with disabilities will be performing the job in the same manner as
the survey firm(s), no additional work measurements need be performed.
But if the methods of production will differ, or if the prevailing wage
yielded an hourly wage rate and the employer of the workers with disabilities
prefers to pay a piece rate, a work measurement must be conducted that will
yield a piece rate.
The following is a detailed description of the steps an employer should
follow when conducting a time-based measurement (setting the standard) for a
job that will be paid on a piece rate basis.
1. Develop job description.
- Define specific job duties, responsibilities and general tasks. It
is important that the employer is able to demonstrate that the work for which
the standard is established is the same as the work for which the worker with a
disability will receive special minimum wages.
- Specify the types of equipment and materials to be used. The
employer must be able to verify that the material and equipment used by the
worker with the disability is the same as that used when the standard was
- List the types of skills, training or experience required.
- Indicate the days and times the work is performed if such factors
could have an impact on the productivity of the worker.
2. Perform a task analysis.
- Identify the components, tasks and subtasks to be performed.
- Develop an accurate picture of the method and procedures used to
accomplish the tasks.
- Include types of equipment and supplies to be used. Specify the area
where the work will be performed.
- Determine a definite start and stop point. The entire job cycle must
be timed, including all preliminary activities (set-up time) and all
postliminary duties (stowing of materials and equipment) to be performed on the
job by the worker with disabilities. The job cycle begins at a specific point,
such as picking up the first piece in an assembly. It ends when that point is
reached again. The employer must be able to verify that the clock was not
stopped to accommodate irregular elements (like equipment failure or depletion
of needed supplies), or, that if it was stopped while the worker with a
disability repaired errors, it was also was stopped while the standard setter
- Ensure that when the worker with the disability performs the actual
work, it is performed in the same way the standard setter performed the work
when establishing the standard, or in a way that allows the worker with the
disability to be more productive.
3. Choose the standard setter(s). Most frequently, this will be a
staff member(s) or worker(s) who is:
- Qualified to perform the task
- Familiar, experienced, and comfortable with the work
- Able to perform in a typical work environment
- Able to maintain a consistent and efficient pace
- Able to perform at or close to 100 percent productivity
4. Time the standard setter (the worker who does not have
disabilities for the work being performed) performing the job.
- This procedure is known as setting the standard.
- The individual conducting the study (the observer) must:
- Use a generally recognized method of work measurement;
- Assure that the standard setter performs the task exactly as it
will be assigned to the worker with the disability. Include irregular elements
when they are part of the job such as depletion of supplies, counting of
finished products, resetting of equipment or machinery, and wait time;
- Structure the study to avoid, as much as possible, lost
time situations. Lost time is time excluded from a time study for an
activity that is not a regularly recurring part of the job. Example: time lost
when a supervisor acting as the standard setter is interrupted during the time
study by an employees question;
- Compare the standard setters actions to the written
- Time the standard setters work using the same start and stop
points as designated earlier;
- Read the stopwatch and make recordings nearly simultaneously;
- Document the measurement used to set the standard. It is important
that the employer record the method used, date the standard was set, and the
personnel involved in conducting the measurement to ensure the standard can be
- Conduct the study three times and determine average units per hour;
- When possible, use three different people as standard setters. The
performance of the individual being time studied should represent a normal
productivity level. The standard setter should not work, or be encouraged to
work, so fast that he or she could not maintain that pace over a work shift. If
the standard setter's performance is above or below normal performance levels,
adjustments (or "leveling") may be done to compensate, but only by someone
knowledgeable in this technique, as evidenced by successful completion of
training in this area (see
Regulations 29 CFR
- Conduct the study for a period long enough to ensure that the work
pace may be sustained throughout the day. Many work centers conduct 25-minute
time studies, although the U.S. Department of Labor Wage and Hour Division does
not require a specific length. For most assembly jobs, 20 to 25 minutes is long
enough to establish a valid production standard;
- Make an allowance for personal fatigue and delay (PF&D) (as
required by Regulations 29 CFR Part
525.12(h)(2)(ii)). For more information about establishing a PF&D
allowance, please read Fact
Sheet 39D, Incorporating Personal Time, Fatigue and Delay (PF&D)
Allowances When Determining Piece Rates to be Paid Workers with Disabilities
Receiving Special Minimum Wages under Section 14(c) of the Fair Labor Standards
Act (FLSA); and
- Use these results to set the piece rate. For example, if the
standard was 200 envelopes stuffed per hour after allowing for an
appropriate PF&D (the average number done by the workers who do not have
disabilities) and the prevailing wage was $7.20, the piece rate would be $.036
per envelope ($7.20/200 = $.036).
- Always multiply the standard "units per hour" by the "piece rate"
you established to ensure that the result equals or exceeds the full
prevailing wage rate. If it does not, then the "rounding" used while
determining the piece rate is most likely incorrect. Remember, when computing
piece rates, always round up.
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FLSA Section 14(c) Advisor |
Wage and Hour Division