Case Study: Making Peace with Piece-Rate Pay

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When determining how to compensate nonexempt employees, employers have a variety of options. Paying an hourly rate is certainly the most common, but other methods include salary, commissions, daily rates, and piece-rate pay (sometimes referred to as piece work). Piece-rate pay refers to a system in which employees are paid a fixed amount per item of work completed per day or per week. Unfortunately, some employers don’t realize piece-rate workers are covered by minimum wage and overtime rules—or worse, they ignore the rules. This can result in substantial liability if employees file suit or complain to the U.S. Department

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