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Wage and Hour Division (WHD)

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FOH Field Operations Handbook
Chapter 64 Employment of Workers with Disabilities at Special Minimum Wages under Section 14(c)
Section 64i Establishing Piece Rates and Personal, Fatigue and Delay Allowances

Section 64i00: How to Determine an Accurate Commensurate Wage Based on a Piece Rate

  • If the prevailing wage study reveals that the prevailing wage is a piece rate, the employer should pay the same piece rate to the worker with a disability. In this situation, there is no need to perform a time study (see FOH 64g07 for what to do if the prevailing wage is hourly and the employer wishes to establish the hourly commensurate rate).
  • This section contains guidance for doing a time study when the prevailing wage survey indicated that workers were paid by the hour, not by the piece, and the employer wishes to pay a piece rate to the workers with disabilities. To determine this rate, the employer must time study workers who do not have disabilities or use other accepted work measurement methods (see FOH 64g04) before he or she can convert the hourly prevailing wage into an equivalent prevailing piece rate.
  • When stop watch time studies are used, the steps the employer must follow to determine an accurate commensurate wage based on a piece rate, when the prevailing wage rate is an hourly wage, are discussed below. See FOH 64g04 and 64i00(e) for guidance when MTM or MODAPTS work measurements are used.
    1. Develop a job description.
    2. Perform a task analysis.
    3. Select the standard setter(s).
    4. Time the worker(s) who do not have disabilities (standard setter(s)) performing the work.
  • The employer should have completed all these steps. They are discussed in more detail below. When reviewing an employer's time studies, the INV should verify that, at a minimum, the employer completed the steps below that are in Italics bold print. These are also the same requirements the INV must follow when conducting his or her own time study (either because none was done previously or to confirm the results of the employer's study).
    1. Develop job description.
      • Define specific job duties, responsibilities and general tasks. The INV must be able to verify that the work performed by the worker with a disability is the same as that performed in the time study.
      • Specify the types of equipment and materials to be used. The INV must be able to verify that the material and equipment used by the worker with the disability is the same as that used in the time study.
      • 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. 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 INV 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 was timed (see rework discussion in FOH 64j02(b)(1)).
      • 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 (see FOH 64i02 for use of jigs in time studies).
    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% productivity.
        Note: Only if three staff members are not available and the job is extremely simple should the INV attempt to time study himself or herself. It is very difficult for an INV to both perform the work and time himself or herself.
    4. Time the standard setter (the worker who does not have disabilities) 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 (see Regulations 29 CFR Part 525.12(h)(1) and FOH 64g04).
        • Assure that the standard setter performs the task exactly as it will be assigned to the worker with the disability.
        • Structure the study to avoid, as much as possible, "lost time" situations. Lost time is a term used by NISH that the INV may find on time study documents. 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 employee's question.
        • Compare the standard setter's actions to the written procedures.
        • Time the standard setter's work using the same start and stop points as designated earlier.
        • Read the stop watch and make recordings nearly simultaneously.
        • Document the measurement used to set the standard. It is important that the employer/INV record the method used, date the standard was set, and the personnel involved in conducting the measurement to ensure the standard can be verified.
        • Conduct the study three times and determine average time per unit. However, because the INV will often need to confirm several time studies, if the original confirming study corroborates the employer's results, the INV is not required to repeat it. If, on the other hand, the results of the confirming study indicate a problem, the INV should conduct further time studies.
        • When possible, use three different people as standard setters. Although Regulations 29 CFR Part 525 does not specifically require timing three different people, using three different people allows for the fact that different people normally work at different paces.
        • 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 Regulations 29 CFR Part 525 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)). See FOH 64i01 below for a discussion of PF&D.
        • 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).
        • The INV must note whether the employer included rework time when setting the standard and whether the employer counted or discarded defective products. The practice must be the same for both the standard setter and the workers with disabilities for the wage to be truly commensurate.
  • Procedures for work centers using MTM or MODAPTS.
    1. As explained in FOH 64g03(c) Methods-Time Measurement (MTM) and Modular Arrangement of Predetermined Time Standards (MODAPTS) are acceptable work measurement methods.
    2. The INV should verify that the individual using these methods has received professional training in those methods.
      • Evidence of this training will be a certificate of completion for these specific methods. Training in similar sounding methods should be questioned.
      • Training that is second-hand should also be questioned. Second-hand training means that the work center sends one person to professional training and that person trains other staff members.
    3. The INV may find it necessary to conduct confirming stop watch time studies of these work measurements.
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