Attorneys Daniel Auerbach & Benjamin Briggs
Most Florida roofing companies are covered by the federal Fair Labor Standards Act (FLSA), as well as Florida’s corresponding state law incorporating the FLSA. Under the FLSA, employers may compensate their employees several different ways, including salary,
hourly, commission, or piece rate (or a combination of these methods). This flexibility can be a great advantage to employers, but it can also become a trap if Florida roofers do not fully understand how to apply these compensation methods in compliance with the FLSA. This article focuses specifically on the piece rate method of compensation.
A piece rate is the amount of money paid per task performed or piece produced. A piece rate fixes a wage payment on each completed unit of work. For the purposes of FLSA compliance, employers must keep two main things in mind when compensating employees on a piece rate basis:
■ The underlying piece rate must be at least minimum wage ($8.25 per hour in Florida) for all hours the employee works during the given workweek; and
■ Employees who work more than 40 hours in a given workweek must receive one-half times their regular rate for all overtime hours.
Compliance with both the minimum wage and overtime requirements is based on the piece rate employee’s “regular rate” for the given workweek. To determine the employee’s regular rate for the week, the employer must divide the employee’s total weekly compensation by the total number of hours he or she worked that week to create an hourly pay rate.
EXAMPLE: If a roofing company pays an employee $600 for piecework during a week, and it took the employee 50 hours to complete the work, the employee’s regular rate for the week is $12 per hour.
With respect to the minimum wage requirement, the piece rate employee’s regular rate must be at least minimum wage. In the above example, the employee received well over Florida’s $8.25 per hour minimum wage. However, the next week, it may take the employee 50 hours to complete $400 of piecework (due to weather, a difficult roof slope, etc.). In that scenario, the employee’s
regular rate is only $8 per hour and is below minimum wage.
To protect against potential minimum wage violations, roofers can pay employees on a piece rate basis, coupled with a minimum hourly guarantee (e.g., guarantee employee will make at least $8.25 per hour). This means that if the piece rate employee’s earnings for a workweek fall short of the guaranteed minimum hourly, the employee is paid the difference to bring him or her up to the
guaranteed hourly rate.
With respect to the FLSA’s overtime requirement, the pieceworker is entitled to be paid his or her extra money for all hours worked over 40 in the workweek. In addition to the piece rate compensation the employee receives at the agreed piece rate, the employee
is entitled to receive additional pay equivalent to one-half the employee’s weekly regular rate of pay multiplied by the number of hours worked in excess of 40 in the week. Only additional half-time pay is required in such cases because the employee has already received straight-time compensation at piece rates.
EXAMPLE: If a roofing company pays an employee $600 for piecework during a week, and it took the employee 50 hours to complete the work, the employee’s regular rate for the week is $12 per hour. The employer must also pay the employee an additional half-time pay for the 10 hours of overtime the employee worked that week. The employee’s half-time rate this week is $6 per overtime hour (half the employee’s $12 per hour regular rate); so, the employer must pay the employee an additional $60 for his or her 10 hours of overtime. Accordingly, this employee’s total weekly pay should be $660.
Finally, it is important to note that roofing companies are required to track their piece rate employees’ hours and keep these records for at least three years. If companies fail to adequately track and record their piece rate employees’ hours, the companies will be unable to properly calculate and prove the employees’ regular rate to comply with the minimum wage and overtime requirements.
These companies will also violate the FLSA’s recordkeeping requirements.
FLSA violations can result in Department of Labor investigations and penalties or civil lawsuits, both of which can be very expensive to defend and may result in significant loss to your company. Thus, it is important to consult with an employment law attorney if a roofing company has any questions or concerns about its payroll practices.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation. Benjamin Briggs is an attorney at Cotney Construction Law who practices all aspects of labor and employment law. Daniel Auerbach is an attorney at Cotney Construction Law who focuses his practice on construction litigation. Cotney Construction Law is an advocate for the roofing industry, General Counsel of FRSA, NWIR, TARC, TRI, RT3, WCRCA, PBCRSMA, and several other local roofing associations. For more information, contact the author at 866-303-5868 or go to www.cotneycl.com.
Previous Article