What Is a Per-Piece Pay Rate or Piecework?
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 piecework will vary based on how skilled he is in completing the work and how time-consuming each piece of work is.
A Flexible Work Option
Piecework, particularly when working 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.
The concept of piecework has been around since the time of the Industrial Revolution, and it was used in garment factories and other manufacturing jobs to pay workers based on production. In today’s economy, it is still used this way, especially in developing nations.
With the advent of the Internet, piecework is now applied to online jobs with non-tangible work outputs. Working from home, people can now do piecework in such fields 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.
Online piecework can be even more varied. There are many micro jobs at places like Amazon's Mechanical Turk where people do small tasks such as clicking links, and they're paid on a per-piece basis.
Piecework and the Minimum Wage
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, she can earn $8.00 per hour. In other words, a 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
Here are some negative things to consider regarding 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.
Benefits of Piecework
Piecework has advantages as well:
- Opportunity for increased pay: As a worker becomes skilled in a particular type of piecework, his speed will increase.
- Flexibility in work hours: This isn’t true of all piecework, but for independent contractors, work can often be done when the worker chooses, many times in very short shifts.