Piece work or piecework is any type of employment in which a worker is paid a fixed piece rate for each unit produced or action performed, [1] regardless of time.
Piece work or piecework is any type of employment in which a worker is paid a fixed piece rate for each unit produced or action performed, [1] regardless of time.
When paying a worker, employers can use various methods and combinations of methods. [2] Some of the most prevalent methods are: wage by the hour (known as "time work"); annual salary; salary plus commission (common in sales jobs); base salary or hourly wages plus gratuities (common in service industries); salary plus a possible bonus (used for some managerial or executive positions); salary plus stock options (used for some executives and in start-ups and some high tech firms); salary pool systems; gainsharing (also known as "profit sharing"); paid by the piece – the number of things they make, or tasks they complete (known as ‘output work’); or paid in other ways (known as ‘unmeasured work’ [lower-alpha 1] ). [4]
Some industries where piece rate pay jobs are common are agricultural work, cable installation, call centers, writing, editing, translation, truck driving, data entry, carpet cleaning, craftwork, garment production, and manufacturing. [5] Working for a piece rate does not mean that employers are exempt from paying minimum wage or overtime requirements, which vary among nations and states. [6]
Employers may find it in their interest to use piece rate pay after examining three theoretical considerations; the cost and viability of monitoring output in a way that accurately measures production so that quality doesn't decrease is first. Variable skill level is second, where piece rates are more effective in a more homogenous workforce. Thirdly, there may be more invasive managerial relations as management attempts to test how fast the workers can produce. [7]
Employees decide whether to work for piece rate pay if the relative earnings are high, and if other physical and psychological conditions are favorable. Some of these might be job stress, physicality, risks, degree of supervision and ability to work with peers or family members. [7] Employees may also be more or less welcoming to performance pay depending on the leverage and risk. Leverage was defined as ratio of variable pay to base pay, and risk is the probability the employee will see increased benefits with effort. Workers tended to be suspicious of pay packages that were too heavy on variable pay and were concerned it might be a concession to remove cost-of living wage adjustments or to secure wage rollbacks. [8]
Under UK law, piece workers must be paid either at least the minimum wage for every hour worked or on the basis of a ‘fair rate’ for each task or piece of work they do. Output work can only be used in limited situations when the employer doesn't know which hours the worker does (e.g. some home workers). If an employer sets the working hours and the workers have to clock in and out, this counts as time work, not as output work.
The fair rate is the amount that allows an average worker to be paid the minimum wage per hour if they work at an average rate. This must be calculated in a set way, a control trial is run to determine the average items produced by equivalent workers, this is divided by 1.2 to reach the agreed average figure, and the fair rate is set to ensure each worker achieves the minimum wage. [9] [lower-alpha 2]
There are several software programs that determine the time that a trained operator should take to perform an operation. These make unit estimations based on the individual motions that an operator is required to make to complete a task. In a service setting, the output of piece work can be measured by the number of operations completed, as when a telemarketer is paid by the number of calls made or completed, regardless of the outcome of the calls (pay for only certain positive outcomes is more likely to be called a sales commission or incentive pay).[ citation needed ] Crowdsourcing systems such as Mechanical Turk involve minute information-processing tasks (such as identifying photos or recognizing signatures) for which workers are compensated on a per-task basis.[ citation needed ]
As a term and as a common form of labor, 'piece work' had its origins in the guild system of work during the Commercial Revolution [ dubious ] and before the Industrial Revolution.[ citation needed ] Since the phrase 'piece work' first appears in writing around the year 1549, it is likely that at about this time, the master craftsmen of the guild system began to assign their apprentices work on pieces which could be performed at home, rather than within the master's workshop. [ citation needed ] In the British factory system, workers mass-produced parts from a fixed design as part of a division of labor, but did not have the advantage of machine tools or metalworking jigs.[ citation needed ] Simply counting the number of pieces produced by a worker was likely easier than accounting for that worker's time, as would have been required for the computation of an hourly wage.[ dubious ]
Piece work took on new importance with the advent of machine tools, such as the machine lathe in 1751.[ citation needed ] Machine tools made possible by the American system of manufacturing (attributed to Eli Whitney) in 1799 in which workers could truly make just a single part but make many copies of it for later assembly by others.[ citation needed ] The reality of the earlier English system had been that handcrafted pieces rarely fit together on the first try, and a single artisan was ultimately required to rework all parts of a finished good.[ dubious ][ citation needed ] By the early 19th century, the accuracy of machine tools meant that piecework parts were produced fully ready for final assembly.
Frederick Winslow Taylor was one of the main champions of the piece rate system in the late 19th century. Although there were many piece rate systems in use, they were largely resented and manipulative. One of the most influential tenets of Scientific Management was Taylor's popularization of the "differential piece rate system", which relied on accurate measurements of productivity rates to create a "standard" production output target. Those who were not able to meet the target suffered a penalty and were likely fired. Taylor spread that in published papers in 1895, and the timed piece rate system gave birth to creating modern cost control and, as a result, modern corporate organization. [10]
In the mid-19th century, the practice of distributing garment assembly among lower-skilled and lower-paid workers came to be known in Britain as the sweating system [ citation needed ] and arose at about the same time that a practical (foot-powered) sewing machine, was developed. [ citation needed ]Factories that collected sweating system workers at a single location, working at individual machines, and being paid piece rates became pejoratively known as sweatshops.[ citation needed ]
There can be improper record keeping at the hands of supervisors attempting to cheat employees, to build piece rate systems that prevent workers from earning higher wages. That is often at the cost of both the worker and the enterprise, however, as the quality and the sustainability of the business will be threatened by decreases in quality or productivity of workers attempting to stay afloat. Put another way, if the payment for producing a well-made item is not enough to support a worker, workers will need to work faster, produce more items per hour, and sacrifice quality. [11]
Today, piece work and sweatshops remain closely linked conceptually even though each has continued to develop separately.[ citation needed ] The label "sweatshop" now refers more to long hours, poor working conditions, and low pay even if they pay an hourly or daily wage labour, instead of a piece rate.[ citation needed ]
In the United States, the Fair Labor Standards Act requires that all employees, including piece work employees, earn at least the minimum wage. In calculating an appropriate piece work rate, employers must keep track of average productivity rates for specific activities and set a piece work rate that ensures that all workers are able to earn minimum wage. [12] If a worker earns less than the minimum wage, the employer has to pay the difference. Exceptions to this rule include instances where: (i) the worker is a family member of the employer; (ii) if in any calendar quarter of the preceding year there were fewer than 500 person-days of work lasting at least one hour; (iii) in agricultural businesses, if a worker primarily takes care of livestock on the range; (iv) if non-local hand-harvesting workers are under 16, are employed on the same farm as their parent, and receive the piece work rate for those over 16. [13]
A sweatshop or sweat factory is a crowded workplace with very poor, illegal working conditions. The manual workers are poorly paid, work long hours, and experience poor working conditions. Some illegal working conditions include poor ventilation, little to no breaks, inadequate work space, insufficient lighting, or uncomfortably/dangerously high or low temperatures. The work may be difficult, tiresome, dangerous, climatically challenging, or underpaid. Workers in sweatshops may work long hours with unfair wages, regardless of laws mandating overtime pay or a minimum wage; child labor laws may also be violated. Women make up 85 to 90% of sweatshop workers and may be forced by employers to take birth control and routine pregnancy tests to avoid supporting maternity leave or providing health benefits. The Fair Labor Association's "2006 Annual Public Report" inspected factories for FLA compliance in 18 countries including Bangladesh, El Salvador, Colombia, Guatemala, Malaysia, Thailand, Tunisia, Turkey, China, India, Vietnam, Honduras, Indonesia, Brazil, Mexico, and the US. The U.S. Department of Labor's "2015 Findings on the Worst Forms of Child Labor" found that "18 countries did not meet the International Labour Organization's recommendation for an adequate number of inspectors."
Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any other entity, pays the other, the employee, in return for carrying out assigned work. Employees work in return for wages, which can be paid on the basis of an hourly rate, by piecework or an annual salary, depending on the type of work an employee does, the prevailing conditions of the sector and the bargaining power between the parties. Employees in some sectors may receive gratuities, bonus payments or stock options. In some types of employment, employees may receive benefits in addition to payment. Benefits may include health insurance, housing, disability insurance. Employment is typically governed by employment laws, organisation or legal contracts.
Overtime is the amount of time someone works beyond normal working hours. The term is also used for the pay received for this time. Normal hours may be determined in several ways:
A wage is payment made by an employer to an employee for work done in a specific period of time. Some examples of wage payments include compensatory payments such as minimum wage, prevailing wage, and yearly bonuses, and remunerative payments such as prizes and tip payouts. Wages are part of the expenses that are involved in running a business. It is an obligation to the employee regardless of the profitability of the company.
A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis. Salary can also be considered as the cost of hiring and keeping human resources for corporate operations, and is hence referred to as personnel expense or salary expense. In accounting, salaries are recorded in payroll accounts.
Labour power is the capacity to do work, a key concept used by Karl Marx in his critique of capitalist political economy. Marx distinguished between the capacity to do work, i.e. labour power, and the physical act of working, i.e. labour. Labour power exists in any kind of society, but on what terms it is traded or combined with means of production to produce goods and services has historically varied greatly.
The National Minimum Wage Act 1998 creates a minimum wage across the United Kingdom. From 1 April 2023, the minimum wage is £10.42 for people aged 23 and over, £10.18 for 21- to 22-year-olds, £7.49 for 18- to 20-year-olds, and £5.28 for people under 18 and apprentices.
Performance-related pay or pay for performance, not to be confused with performance-related pay rise, is a salary or wages paid system based on positioning the individual, or team, on their pay band according to how well they perform. Car salesmen or production line workers, for example, may be paid in this way, or through commission.
The Labor Code of the Philippines is the legal code governing employment practices and labor relations in the Philippines. It was enacted through Presidential Decree No. 442 on Labor day, May 1, 1974, by President Ferdinand Marcos in the exercise of his then extant legislative powers.
The Fair Labor Standards Act of 1938 29 U.S.C. § 203 (FLSA) is a United States labor law that creates the right to a minimum wage, and "time-and-a-half" overtime pay when people work over forty hours a week. It also prohibits employment of minors in "oppressive child labor". It applies to employees engaged in interstate commerce or employed by an enterprise engaged in commerce or in the production of goods for commerce, unless the employer can claim an exemption from coverage. The Act was enacted by the 75th Congress and signed into law by President Franklin D. Roosevelt in 1938.
Iranian labor law describes the rules of employment in Iran. As a still developing country, Iran is considerably behind by international standards. It has failed to ratify the two basic Conventions of the International Labour Organization on freedom of association and collective bargaining, and one on abolition of child labor. Countries such as the US and India have also failed to ratify many of these Conventions and a mere 14 other Conventions, only 2 since the Islamic Revolution.
Sweatshop-free or sweat free is a term first used by American Apparel, a famous American clothing brand, which means coercion-free, fair-compensation for the garment workers who manufacture their products. The aim of sweatshop-free wish to ensure that all employees are treated fairly and products are made in good working conditions. Sweatshop-free standards include the right to collective bargaining, non-poverty wages, safe workplaces, back wages, and non-harassment. It has been heavily featured in American Apparel’s advertisements and become a common term in the garment industry.
Wage Payment Systems are the different methods adopted by organizations by which they remunerate labour. There exist several systems of employee wage payment and incentives, which can be classified under the following names.
Microwork is a series of many small tasks which together comprise a large unified project, and it is completed by many people over the Internet. Microwork is considered the smallest unit of work in a virtual assembly line. It is most often used to describe tasks for which no efficient algorithm has been devised, and require human intelligence to complete reliably. The term was developed in 2008 by Leila Chirayath Janah of Samasource.
The Labor policy in the Philippines is specified mainly by the country's Labor Code of the Philippines and through other labor laws. They cover 38 million Filipinos who belong to the labor force and to some extent, as well as overseas workers. They aim to address Filipino workers’ legal rights and their limitations with regard to the hiring process, working conditions, benefits, policymaking on labor within the company, activities, and relations with employees.
Wage theft is the failing to pay wages or provide employee benefits owed to an employee by contract or law. It can be conducted by employers in various ways, among them failing to pay overtime; violating minimum-wage laws; the misclassification of employees as independent contractors; illegal deductions in pay; forcing employees to work "off the clock", not paying annual leave or holiday entitlements, or simply not paying an employee at all.
The National Minimum Wage Regulations 1999 were passed as a statutory instrument under the National Minimum Wage Act 1998 to specify various detailed points about how to calculate whether someone is being paid the minimum wage, who gets it, and how to enforce it.
The Santa Clara cannery strike occurred during the summer of 1931. Workers spontaneously walked out of canneries in order to protest a 20% cut in wages. These workers were met with violence from local authorities, and strikebreakers were brought in to replace the workers. While this strike was unsuccessful, it marked the beginning of organizing cannery workers.
Italy does not have a nationally unified labor code. Labor legislation is wide-ranging, with laws, regulations and statutes that bear on labor relations. The Constitution of Italy contains declarations of principle relating to fair payment, maximum working hours, vacation, protection of women and minors, social insurance, illness, disability, industrial diseases and accidents, Freedom of Association and the right to strike. The Workers' Statute of 1970 was modified, and plays an important role.
After the Chinese Communist Party (CCP) extended its ruling to most parts of China and set up a national government in Beijing in 1949, it encountered a lot of new tasks. The first was to rebuild the economy, which deteriorated sharply during the last years of Nationalist Party (KMT) governing. The strategy that led CCP to state power is termed as "using the rural areas to encircle the cities" (农村包围城市). Thus, one difficulty CCP had in economy was that it had little experience in dealing with the urban part of the economy. Furthermore, facing the threat of KMT's fighting back, it needed to consolidate its political power. To meet these challenges, a new and coherent wage system in the economic sector was needed. Naturally, this transformation of wage system had both political goals and economic goals. Economically, via setting up a new wage system, CCP wanted to stabilize the economic situation, to ensure normal people's everyday living and also to further develop the economy. Politically, CCP not only wanted to distinguish itself from the old KMT regime by this new wage system, but also to make the wage system suitable for the future socialist economy. After two wage reforms in 1952 and 1956, a new wage system was established, and its influence continued to today.
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