Oregon Wage Laws on Piece Rate or Flat Rate Pay Plans

What is a piece rate pay plan?

A piece rate pay plan is one that is designed to pay the employee based upon their production. For each unit, or piece, the employee is paid a specific amount of money. There are many examples of piece rate plans. Truck drivers often are paid a set rate for each mile they drive, making each mile they drove a “piece” for purposes of calculating wages. Cable installers are paid for each task they perform for customers, making each modem they install a “piece” for calculating wages. Roofers may be paid for each square of roofing that install. Often piece rate plans supplement other wage payment plans. For instance, a warehouse employee may get minimum wage plus $1.00 in bonus for each 100 units they load on a truck. There are advantages and disadvantages to piece rate plans for employers. If production is the only factor they care about, then they can pay based upon how much is produced. For an employee, they theoretically control how much they make with their efforts. Disadvantages, include systems where you cannot produce because the employer has insufficient work, or they assign you jobs you cannot make piece rate from performing. As stated above, there is an open question in Oregon law whether the employee are separately due minimum wages for non-piece rate work when their only pay is derived from their piece work. Piece rate plans can be the sole compensation for the work or piece rate plans may only be part of the compensation for the work.

Is it lawful to pay employees using a piece rate pay plan?

Whether a piece rate pay plan is lawful depends upon how the piece rate pay plan is written. There are two bodies of wage and hour law that can affect the lawfulness of the wage plan implemented by employers in Oregon. The federal government implemented the Fair Labor Standards Act, or FLSA for short. This set of laws regulates primarily minimum wage and overtime. Oregon also has implemented its own set of wage and hour laws. Like the FLSA, Oregon regulates overtime and minimum wage. While at their core, the FLSA and Oregon wage laws seek to have the employees paid at minimum standards, they do so in different ways. When a piece rate pay system is designed correctly, it will comply with both federal and state wage and hour laws. Navigating piece rate pay plans can be confusing. This is where having Schuck Law’s experienced wage claim attorneys can help. Our lawyers understand the nuances of piece rate pay plans and their application to federal and state laws.

Are piece rate employees due minimum wages?

Yes, employees earning piece rates are generally due minimum wages. There are minimum wage exemptions that could apply, but the minimum wage exemptions are narrowly construed against the employer under Oregon wage and hour law. Most employees must be paid at least minimum wage under both the FLSA and Oregon’s minimum wage laws. Minimum Wage Page. Both the exemptions and the rate of minimum wage varies between the FLSA and Oregon’s minimum wage laws. To ensure that you are paid appropriately, you should enter both your actual time (accurately) and the number of pieces you perform in a log book or work sheet to compare to your actual pay. The wage lawyers at Schuck Law can help you determine the correct application of each to your specific piece rate compensation pay plan.

How are minimum wages calculated for piece rate pay plans?

The piece rate work laws under both the FLSA and Oregon wage and hour laws require minimum wage to be calculated on an hourly basis. For piece rate pay plans, the piece rate must be turned into an hourly rate to determine whether the employer is complying with the FSLA and Oregon’s minimum wage laws. Thus, even though an employer pays their employees on a piece rate, and not an hourly rate, the employer is still required to track all hours worked. Where tracking hours worked can get confusing is when work is performed that does not relate to pay. For instance, a truck driver getting paid solely for driving miles, is paid nothing for loading or unloading the truck, or for pre-inspection of the truck. A construction worker paid per square foot of siding installed is paid nothing for work meetings. The Washington’s Supreme Court just ruled that this time must be separately paid minimum wage and the piece rate earned performing the primary function cannot be averaged to cover this work time. Carranza v. Dovex Fruit Co.. With you log book or work sheet showing the hours worked and pieces performed, you should be able to calculate your wages and compare to the actual wages paid.

Are employees on piece rate pay plan entitled to overtime pay?

Yes, generally employees on a piece rate pay plan are entitled to overtime wages. Like with minimum wage, there are two bodies of law that affect overtime pay. Each body of law has their own exemptions from overtime. Some of the exemptions are the same and some are not. Also like minimum wage, the FLSA and Oregon’s overtime laws can result in different wages being due. Oregon employers, who are subject to both laws, are required to pay the employee according to the most beneficial overtime laws. Both the FLSA and Oregon’s overtime laws require payment of overtime wages when the employee works more than 40 hours. Both the FLSA and Oregon’s overtime laws calculate overtime wages by multiplying the “regular hourly rate” by 1 1/2, and require the payment at the new rate for all hours in excess of 40 hours per week. Where it gets confusing is determining how to calculate the “regular hourly rate” for piece rate and employees receiving bonuses. Just like with minimum wages, your log book or worksheet will help you calculate your wages to ensure that your employer is paying you correctly.

Under Oregon overtime wage laws, to determine the regular rate of pay applicable to a piece rate pay system, you take the piece rate wages and divide it by the number of hours it took to earn it. This calculation can get more confusing because minimum wages must also be paid. As discussed above, minimum wages should be paid for all time worked that is not part of earning the piece rate wages. Most employers do not pay wages for time worked doing tasks unrelated to the principle tasks resulting in the piece rate pay. For instance, if an employee works 50 hours, 5 of which are doing tasks unrelated to earning their piece rate pay. While no Oregon Court has addressed this pay, we strongly believe the employee is due minimum wage for the 5 hours. These 5 hours of minimum wages should be added to the piece rate wages when determining the overtime rate under Oregon law. Under Oregon’s overtime wage law, in addition to unpaid overtime, an employee could be entitled to 30 days of wages as a civil penalty. Overtime page.

Under the FLSA, all wages are added together then divided by all hours worked to get the “regular rate” of pay to calculate overtime wages. Where the FLSA differs, is that Oregon does not require bonuses be calculated into the “regular hourly rate” and the FLSA does. As discussed above, some piece rate pay plans utilize a bonus structure. Thus, the piece rate may be included in the bonus. In these types of cases, the “regular rate” used to calculate overtime wages will differ between the FLSA and Oregon’s overtime laws. In a recent case, Schuck Law prosecuted an overtime claim based upon a piece rate and a piece rate bonus pay plan. In that case, the bonus was unlawfully calculated in a way to prevent payment of overtime wages. Cable Communications Opinion. Under the FLSA, where an employer does not pay all overtime wages, even piece rate wages, the employee is due the unpaid overtime wages and a matching amount as liquidated damages. 

Are employees on piece rate pay plan entitled to overtime pay?

Yes, generally employees on a piece rate pay plan are entitled to overtime wages. Like with minimum wage, there are two bodies of law that affect overtime pay. Each body of law has their own exemptions from overtime. Some of the exemptions are the same and some are not. Also like minimum wage, the FLSA and Oregon’s overtime laws can result in different wages being due. Oregon employers, who are subject to both laws, are required to pay the employee according to the most beneficial overtime laws. Both the FLSA and Oregon’s overtime laws require payment of overtime wages when the employee works more than 40 hours. Both the FLSA and Oregon’s overtime laws calculate overtime wages by multiplying the “regular hourly rate” by 1 1/2, and require the payment at the new rate for all hours in excess of 40 hours per week. Where it gets confusing is determining how to calculate the “regular hourly rate” for piece rate and employees receiving bonuses. Just like with minimum wages, your log book or worksheet will help you calculate your wages to ensure that your employer is paying you correctly.

Under Oregon overtime wage laws, to determine the regular rate of pay applicable to a piece rate pay system, you take the piece rate wages and divide it by the number of hours it took to earn it. This calculation can get more confusing because minimum wages must also be paid. As discussed above, minimum wages should be paid for all time worked that is not part of earning the piece rate wages. Most employers do not pay wages for time worked doing tasks unrelated to the principle tasks resulting in the piece rate pay. For instance, if an employee works 50 hours, 5 of which are doing tasks unrelated to earning their piece rate pay. While no Oregon Court has addressed this pay, we strongly believe the employee is due minimum wage for the 5 hours. These 5 hours of minimum wages should be added to the piece rate wages when determining the overtime rate under Oregon law. Under Oregon’s overtime wage law, in addition to unpaid overtime, an employee could be entitled to 30 days of wages as a civil penalty. Overtime page.

Under the FLSA, all wages are added together then divided by all hours worked to get the “regular rate” of pay to calculate overtime wages. Where the FLSA differs, is that Oregon does not require bonuses be calculated into the “regular hourly rate” whereas, the FLSA does. As discussed above, some piece rate pay plans utilize a bonus structure. Thus, the piece rate may be included in the bonus. In these types of cases, the “regular rate” used to calculate overtime wages will differ between the FLSA and Oregon’s overtime laws. In a recent case, Schuck Law prosecuted an overtime claim based upon a piece rate and a piece rate bonus pay plan. In that case, the bonus was unlawfully calculated in a way to prevent payment of overtime wages. Cable Communications Case. Under the FLSA, where an employer does not pay all overtime wages, even piece rate wages, the employee is due the unpaid overtime wages and a matching amount as liquidated damages. We believe that Oregon law will be interpreted the same providing minimum wages for work performed unrelated to the piece rate earning work.

What is a flat rate pay plan?

A flat rate pay plan is one that is designed to pay the employee based upon their production. This is often found in the auto industry. Mechanics and other dealer employees are often paid each unit they repair, diagnose, or handle. For example, the dealers have handbooks that say how long each repair should take and the employee is paid a specific amount for it based upon the estimated time figures for the repair. Often, the flat rate plan is the sole compensation for the work. Sometimes there may be other compensation in addition to the flat rate.

Is it lawful to pay employees using a flat rate pay plan?

It depends upon the pay plan and what work is being performed whether the flat rate is a lawful pay plan. There are two bodies of wage and hour law that can affect the lawfulness of the flat rate wage plan implemented by employers in Oregon. The federal government implemented the Fair Labor Standards Act, or FLSA for short. This set of laws regulates primarily minimum wage and overtime. Oregon also has implemented its own set of wage and hour laws. Like the FLSA, Oregon regulates overtime and minimum wage. While at their core, the FLSA and Oregon wage laws seek to have the employees paid at minimum standards, they do so in different ways. When a flat rate pay system is designed correctly, it will comply with both federal and state wage and hour laws. Navigating flat rate pay plans can be confusing. This is where having Schuck Law’s experienced wage claim attorneys can help. Our lawyers understand the nuances of flat rate pay plans and their application to federal and state laws.

Are flat rate employees due minimum wages?

Yes, employees earning flat rates are generally due minimum wages. There are minimum wage exemptions that could apply, but the minimum wage exemptions are narrowly construed against the employer. Most employees must be paid at least minimum wage under both the FLSA and Oregon’s minimum wage laws. Minimum Wage Page. Both the exemptions and the rate of minimum wage varies between the FLSA and Oregon’s minimum wage laws. The wage lawyers at Schuck Law can help you determine the correct application of each to your specific flat rate compensation pay plan.

How are minimum wages calculated for flat rate pay plans?

Under both the FLSA and Oregon wage and hour law, minimum wage is calculated on an hourly basis. For flat rate pay plans, the flat rate wages must be turned into an hourly rate to determine whether the employer is complying with the FSLA and Oregon’s minimum wage laws. Thus, even though an employer pays their employees on a flat rate, and not an hourly rate, the employer is still required to track all hours worked. Where tracking hours worked can get confusing is when work is performed that does not relate to pay. For instance, a mechanic is getting paid solely for repairing vehicles and is paid nothing for cleaning cars, moving cars, or office meetings. The Washington’s Supreme Court just ruled that this time must be separately paid minimum wage and the piece rate earned performing the primary function cannot be averaged to cover this work time. Carranza v. Dovex Fruit Co.. We believe that Oregon’s minimum wage laws are written in the same way requiring payment of minimum wages for all non-flat rate earning time worked

The relevant Oregon wage and hour statutes discussed above are ORS 652.140 and ORS 652.150 which may be found at the following link. Oregon Wage Statutes.

Are employees on flat rate pay plan entitled to overtime pay?

Yes, generally employees on a flat rate pay plan are entitled to overtime wages. Like with minimum wage, there are two bodies of law that affect overtime pay. Each body of law has their own exemptions from overtime. Some of the exemptions are the same and some are not. Also like minimum wage, the FLSA and Oregon’s overtime laws can result in different wages being due for employees on flat rate pay plans. Oregon employers, who are subject to both laws, are required to pay the employee according to the most beneficial overtime laws. Both the FLSA and Oregon’s overtime laws require payment of overtime wages when the employee works more than 40 hours. Both the FLSA and Oregon’s overtime laws calculate overtime wages by multiplying the “regular hourly rate” by 1 1/2, and require the payment at the new rate for all hours in excess of 40 hours per week. Where it gets confusing is determining how to calculate the “regular hourly rate” for flat rate and employees receiving bonuses.

Under Oregon overtime wage laws, to determine the regular rate of pay applicable to a flat rate pay system, you take the piece rate wages and divide it by the number of hours it took to earn it. This calculation can get more confusing because minimum wages must also be paid. As discussed above, minimum wages should be paid for all time worked that is not part of earning the flat rate. Most employers do not pay wages for time worked doing tasks unrelated to the principle tasks resulting in the flat rate pay. For instance, if an employee works 50 hours, 5 of which are doing tasks unrelated to earning their flat rate pay. While no Oregon Court has addressed this pay, we strongly believe the employee is due minimum wage for the 5 hours. These 5 hours of minimum wages should be added to the flat rate wages when determining the overtime rate under Oregon law. Under Oregon’s overtime wage law, in addition to unpaid overtime, an employee could be entitled to 30 days of wages as a civil penalty. Overtime page.

Under the FLSA, all wages are added together then divided by all hours worked to get the “regular rate” of pay to calculate overtime wages. Where the FLSA differs, is that Oregon does not require bonuses be calculated into the “regular hourly rate” whereas, the FLSA does. As discussed above, some flat rate pay plans utilize a bonus structure. Thus, the flat rate may be included in the bonus. In these types of cases, the “regular rate” used to calculate overtime wages will differ between the FLSA and Oregon’s overtime laws. In a recent case, Schuck Law prosecuted an overtime claim based upon a piece rate and a piece rate bonus pay plan. In that case, the bonus was unlawfully calculated in a way to prevent payment of overtime wages. Cable Communications Case. Under the FLSA, where an employer does not pay all overtime wages, even flat rate wages, the employee is due the unpaid overtime wages and a matching amount as liquidated damages.

Both the FLSA and Oregon’s wage laws often work together to benefit employees who were incorrectly paid under a flat or piece rate pay plan. One such way is that Oregon wage and hour law sets time deadlines for payment of wages when the employment relationship ends. An employer must pay all wages due to the employee within these time lines. This requirement includes any unpaid minimum wages, overtime wages, or flat rate wages that were not paid. For instance, where the employer terminates (fires) the employee, all wages are due within one business day under Oregon’s wage and hour laws. If an employer/boss willfully fails to timely pay all final wages, the employee may be able to recover up to 30 days of penalty wages in addition
to the unpaid wages by having our Oregon wage claim attorneys file a wage claim lawsuit in Oregon…Late Pay Page

Oregon Wage Claim Attorneys

The Oregon wage claim attorneys (lawyers) at Schuck Law, LLC focus their law practice on wage claim lawsuits. Our Oregon wage claim lawyers (attorneys) regularly prosecute Oregon wage claim lawsuits for employees who were not timely paid their final wages. In addition to the claims for damages outlined above, an employee may also sue to recover their costs, disbursements, and lawyer (attorney) fees incurred in prosecution of the wage claim lawsuit. This allows the Oregon wage claim attorneys at Schuck Law, LLC to take most Oregon wage claim lawsuits on a contingency fee basis. This means, with minor exceptions that are within your control, that our Oregon wage claim lawyers (attorneys) get paid by your employer their lawyer (attorney) fees only they recover wages or penalty wages for you.

Our Oregon wage claim attorneys (lawyers) prosecute wage claims and late final paycheck wage claims throughout Oregon,  including but not limited to, Portland, Astoria, Beaverton, Portland, Bend, Clackamas, Coos Bay, Grants Pass, Hillsboro, Portland, Hood River, Klamath Falls, Lake Oswego, Oregon City, Portland, Madras, McMinnville, Medford, Milwaukie, Portland,  Newberg, Oregon City, Portland, Sandy, St. Helens, Portland, Tillamook, and West Linn.

Google By David Schuck