What Is a Per-Piece Pay Rate or Piece Work?
In per-piece pay structures, payment is based on the number of “pieces” of work that a worker completes. The worker is paid a monetary rate of a certain number of cents or dollars for each piece of work. What constitutes a “piece” worthy of the set rate is defined in advance. The hourly wage of a worker engaged in piece work will vary based on how skilled he or she is in completing the work and how time-consuming each piece of work is.
Piecework, particularly when done from home, may have no set time frame for completion, making it a very flexible work option. Some jobs may have hourly or daily quotas. Piecework has been used in manufacturing goods but can also be used in jobs with non-tangible work outputs, such as data entry or writing.
The concept of piecework has been around a long time, before the Internet, online jobs and data entry. It has been used in garment factories and other manufacturing jobs to pay workers based on production since the time of the Industrial Revolution. In today’s economy, it is still used that way, especially in developing nations.
In the work-at-home world, piece work is also used in fields such as data entry, translation, writing, editing and call centers. In these lines of work, the “pieces” may be clearly defined and incorporated in the rate, such as per-minute talk time, per call, per completion, per word, per keystroke, per page, or on a project basis.
The pieces can be even more varied than that online. There are many micro jobs at places like Amazon's Mechanical Turk where people do small tasks such as clicking links and are paid on a per piece basis.
In the United States and in other countries with minimum wage laws, this type of pay rate must be used in conjunction with minimum wage laws for employees.
For instance, an employee who works at a $.01 per-piece rate and completes 60 pieces in an hour would not receive $6 but would still receive the state’s minimum wage. If the worker is able to work fast enough to complete 80 pieces in an hour, he or she can earn $8.00 per hour. In other words, per-piece rate pay can act as an incentive for employees.
Note that only employees are protected by minimum wage laws, not independent contractors, and per-piece pay structures are often used as pay rates for freelancers or independent contractors.
Pitfalls of Piecework
- Work could be rejected for quality issues - Work-at-home scams in assembly work and stuffing envelopes use poor quality as an excuse to refuse to pay. Acceptable quality must be clearly spelled out in any kind of per-piece pay arrangement.
- Lower wages at the beginning - Even those with experience in a field will need a little time to ramp up in order to work at a rate that earns a good rate.
- No pay when work is not available - This is particularly a problem for call center workers who may be paid per call or per talk time minute but must wait for calls to come in. They cannot do anything else while they wait for calls, so there can be significant amounts of unpaid time.
- No minimum wage protections - This is only true of independent contractors or freelancers. Most piece-work is for contractors, not employees.
Benefits of Piecework
- Opportunity for increased pay - As a worker becomes skilled in a particular type of piece work, his or her speed will increase.
- Flexibility in work hours - This isn’t true of all piece work, but for independent contractors, often work can be done when the worker chooses often in very short shifts.