Every Piece Rate Worker Must Earn Minimum Wage — Every Workweek
Paying piece rate does not exempt you from minimum wage laws. Not even close. Under the Fair Labor Standards Act and every state labor code in the country, piece rate workers must earn at least the applicable minimum wage for every hour worked in every workweek. If their piece rate earnings fall short, you owe them the difference. That difference is called make-up pay, and failing to pay it is a wage violation.
This trips up more contractors than almost any other compliance issue. When I was running roofing crews, I set piece rates that I thought were generous. My guys were making good money most weeks. But some weeks — slow jobs, bad weather, difficult roofs — their production dropped and their effective hourly rate fell below minimum wage. I did not know I owed them make-up pay until someone explained it to me. By then, I had months of unpaid make-up amounts on the books that I did not even know about.
Here is how the minimum wage requirement works for piece rate pay, how to calculate make-up pay, which states make it more complicated, and what happens if you get it wrong.
How Minimum Wage Applies to Piece Rate Pay
The FLSA requires that every non-exempt employee earns at least the federal minimum wage ($7.25/hour) for every hour worked. Most construction workers are non-exempt regardless of how they are paid. The calculation is simple:
Effective hourly rate = Total piece rate earnings / Total hours worked in the workweek
If the effective hourly rate is below the applicable minimum wage, you must pay the difference.
Make-up pay = (Minimum wage - Effective hourly rate) x Total hours worked
Here is a worked example. Federal minimum wage is $7.25, but let's use a more realistic scenario — your state minimum wage is $15.00 per hour.
A framing crew member earns $480 in piece rate pay during a week where he worked 40 hours.
- Effective hourly rate: $480 / 40 hours = $12.00/hour
- That is below the $15.00 state minimum wage
- Shortfall per hour: $15.00 - $12.00 = $3.00
- Make-up pay owed: $3.00 x 40 hours = $120.00
- Total compensation: $480 + $120 = $600.00
That worker's paycheck needs to show $600, not $480. Use our Minimum Wage Calculator to check these numbers for your state.
Which Minimum Wage Applies?
This is where it starts to get complicated. There are three possible minimum wage rates that could apply to your workers, and you must use whichever one is highest:
- Federal minimum wage: $7.25/hour (unchanged since 2009)
- State minimum wage: varies by state, many are significantly higher
- Local minimum wage: some cities and counties have their own higher rates
The highest applicable rate wins. Always. If you operate in Seattle where the minimum wage is over $20/hour, that is your floor — not the $7.25 federal rate and not the Washington state rate.
Here are some of the highest state minimum wages as of 2026 that construction contractors commonly deal with:
| State | Minimum Wage (2026) |
|---|---|
| Washington | $17.13+ |
| California | $16.90+ |
| New York (NYC) | $17.00+ |
| Massachusetts | $15.00+ |
| Connecticut | $15.69+ |
| Oregon | $15.95+ (Portland metro) |
| Colorado | $14.81+ |
| Arizona | $14.70+ |
| New Jersey | $15.49+ |
| Illinois | $15.00+ |
These rates change annually in most states. Check our State Minimum Wage tool for current rates.
If your crew works across state lines or in different cities, you need to track which minimum wage applies based on where the work is performed — not where your company is located.
When Make-Up Pay Gets Triggered
Make-up pay is not something that happens once in a blue moon. For piece rate construction crews, there are predictable situations that trigger it regularly:
Weather Delays
Your crew shows up, starts working, then rain shuts them down after three hours. They earned piece rate for three hours of production but were on the clock for eight hours of waiting, setup, and travel. Their effective hourly rate for the day is based on piece earnings divided by all hours worked — including the waiting time.
Difficult Jobs
Some jobs just produce fewer pieces per hour. A reroofing job with three layers of old shingles, steep pitch, and limited access is going to be slower than a simple one-layer tear-off on a walkable ranch. If your piece rates are set for average conditions, difficult jobs can push workers below minimum wage.
New Workers
A new crew member who is still learning the trade is going to produce fewer pieces per hour than your experienced guys. Until they get up to speed, their effective rate might fall below minimum wage. You still owe them the full minimum.
Short Weeks
If you send a crew home after two days because of a job delay or material shortage, their total piece earnings for the week might be fine on a per-hour basis — or they might not be. Short weeks with low production are a common trigger.
Nonproductive Time
Time spent traveling between job sites, loading materials, attending safety meetings, or waiting for inspections is compensable time that counts toward total hours worked. But if your crew is only earning piece rate during production time, all that nonproductive time dilutes their effective hourly rate.
This is one of the reasons why tracking hours alongside pieces is so critical. You cannot check minimum wage compliance if you do not know the total hours worked.
State-by-State Complications
Federal minimum wage compliance is the floor. Many states add their own requirements that make piece rate minimum wage more complex.
California: The Most Complex
California under AB 1513 requires employers to separately compensate piece rate workers for:
- Rest and recovery periods at the higher of the minimum wage or the average piece rate hourly rate
- Other nonproductive time at the minimum wage or applicable piece rate, whichever is higher
This means California piece rate workers essentially have three pay calculations: piece rate for productive time, a separate rate for rest periods, and a separate rate for nonproductive time. You cannot just divide total earnings by total hours — you need to break out each category.
Failure to separately compensate rest periods in California can trigger penalties of $50 per worker per pay period for initial violations and $100 for subsequent violations, plus the unpaid wages plus interest.
Use our California Piece Rate tool to check compliance with these specific requirements.
Washington
Washington requires that piece rate workers receive at least the state minimum wage for all hours worked, including time between pieces, travel, and breaks. The state has specific rules for agricultural piece rate that sometimes get applied to construction work by aggressive investigators.
New York
New York has different minimum wage rates depending on where in the state the work is performed. New York City, Nassau/Suffolk/Westchester counties, and the rest of the state each have different rates. Construction companies working in the NYC metro area need to track which rate applies to each job site.
Oregon
Oregon has three minimum wage tiers: Portland metro, standard counties, and nonurban counties. Like New York, the applicable rate depends on the job location.
Colorado
Colorado requires daily overtime after 12 hours and weekly overtime after 40 hours. When calculating minimum wage compliance for piece rate workers, you need to account for overtime hours in the weekly calculation, which changes the math slightly.
Record-Keeping Requirements
Meeting the minimum wage requirement is not enough. You also need to prove you met it. Here is what you should be documenting for every piece rate worker, every workweek:
- Total hours worked — daily and weekly
- Total piece rate earnings — with a breakdown by task and rate
- Calculated effective hourly rate — total earnings divided by total hours
- Applicable minimum wage — for the location where work was performed
- Make-up pay amount — if any was required, show the calculation
- Total compensation paid — piece rate earnings plus any make-up pay plus any overtime
These records need to be kept for at least three years under federal law, and longer in states like New York (six years) and California (four years recommended by most employment attorneys).
If a worker files a wage claim and you cannot produce these records, the burden of proof shifts to you. And as I explained in my article on hidden risks of piece rate without tracking hours, losing that burden of proof almost always means losing the case.
Penalties for Getting It Wrong
Minimum wage violations are taken seriously by every enforcement agency. Here is what is at stake:
Federal Penalties
- Back pay for every dollar of minimum wage not paid, going back up to two years (three years for willful violations)
- Liquidated damages equal to the back pay amount — that doubles what you owe
- Attorney fees for the employee if they bring a private lawsuit
- Civil penalties up to $2,515 per violation for willful or repeated violations
- Injunction requiring future compliance
State Penalties (Examples)
California:
- Waiting time penalties up to 30 days of daily pay per employee
- $50 per employee per pay period for initial wage statement violations (Labor Code 226), $100 for subsequent violations
- Additional PAGA penalties ($100 initial / $200 subsequent per pay period) if employees sue on behalf of the state
New York:
- Liquidated damages of 100% of underpayments
- Civil penalties of up to $20,000 per violation
- Criminal penalties for willful violations, including potential imprisonment
Washington:
- Double damages (liquidated damages equal to unpaid wages)
- Attorney fees
- Interest on all unpaid amounts
Class Action Exposure
Here is what really keeps employment lawyers up at night. If you are not paying make-up pay to one worker, you are probably not paying it to any of your workers. That turns an individual wage claim into a class action or collective action covering every piece rate worker in your company for the past two to three years.
A single worker's claim for $120 in weekly make-up pay becomes 15 workers times 52 weeks times 3 years times 2 (liquidated damages) = $561,600 in potential liability. That is before attorney fees.
How to Stay Compliant
Step 1: Track Hours for Every Piece Rate Worker
You cannot check minimum wage compliance without hour records. Every worker needs to log their start time, end time, and breaks every day. No exceptions. Read our full breakdown of why hour tracking is required for piece rate workers.
Step 2: Calculate the Effective Hourly Rate Every Week
At the end of each workweek, divide each worker's total piece rate earnings by their total hours worked. If the result is below the applicable minimum wage, you owe make-up pay. This check needs to happen before paychecks go out, not after.
Step 3: Know Your Applicable Minimum Wage
If you work in multiple states or cities, create a reference sheet of every applicable minimum wage rate. Update it every January when rates change. Apply the correct rate based on where the work was performed, not where your office is.
Step 4: Set Piece Rates That Usually Clear Minimum Wage
Your piece rates should be set high enough that workers earning at an average production pace clear the minimum wage requirement most of the time. If you are paying make-up pay every week, your rates are too low. Our guide on setting fair piece rates covers how to find the right balance.
Use the Piece Rate Calculator to test different rates and see what the effective hourly rate works out to at various production levels. If a worker producing at 75% of average speed still clears minimum wage, you are probably in good shape.
Step 5: Automate the Check
Manual calculations get skipped when things get busy. And in construction, things are always busy. You need a system that automatically calculates the effective hourly rate and flags when make-up pay is needed. Doing this by hand on spreadsheets works until it does not — and when it fails, you are the one who pays.
Piece Work Pro runs this minimum wage check automatically every pay period. When a worker's effective rate falls below the applicable minimum wage, the system flags it and calculates the make-up amount before you finalize payroll.
Step 6: Document Everything
Keep records of your minimum wage calculations, make-up pay amounts, and the rates you used. If you are ever audited, you want to be able to show that you had a system in place, that you ran the calculations consistently, and that you paid make-up amounts when they were triggered.
Make-Up Pay Is Not a Failure
Some contractors view make-up pay as a sign that their piece rates are too low. That is not necessarily true. Make-up pay is designed to protect workers during weeks when production is low for any reason — weather, difficult jobs, equipment breakdowns, or just a bad week. It is a safety net, not a problem.
The problem is not paying make-up pay when it is owed. The problem is not knowing it is owed because you are not tracking the hours to calculate it.
If you are paying piece rate, you need to check minimum wage compliance every single workweek, for every single worker. No shortcuts, no assumptions, no "my rates are high enough that it's not an issue." Run the math. Pay what is owed. Keep the records.
The cost of compliance is a few minutes per worker per week. The cost of non-compliance can be hundreds of thousands of dollars. That is not a hard choice. Read up on the full FLSA requirements for piece rate employers and the most common piece rate payroll mistakes to make sure you are covering all the bases.