Day Rates, Piece Rates & Salary

Many trades pay by the day, by the piece or by a fixed weekly amount. Employers sometimes say this means no overtime, but that isn’t how the law works. Federal wage law looks at what you do and how many hours you work, not just how you’re paid. Knowing how your pay should be figured helps you spot underpayment.

• Workers
• Contractors
• Trades
• California

The starting point: minimum wage and overtime

• The federal Fair Labor Standards Act (FLSA) requires covered employers to pay at least the minimum wage for every hour worked and overtime at one and a half times the regular rate for hours over 40 in a workweek, unless the worker is truly exempt. See Minimum Wage and Overtime.
• These rules apply however you’re paid: by the hour, day, piece, job, commission or salary. The way pay is calculated changes the math, but not the right to be paid properly.
• State laws may be stricter. Some states require daily overtime, higher minimums and special rules for piece rates. See State Labor Law Table.
• Employees are covered. People who are truly independent contractors are not, but many workers are misclassified. See Misclassification.

Day rates

• A day rate is a flat amount for a day’s work, regardless of how many hours you work that day.
• A day rate does not exempt you from overtime. If you’re a non-exempt employee, you must still be paid overtime for hours over 40 in the week, and you must still earn at least minimum wage for all hours worked.
• To figure overtime, the regular rate is your total pay for the week (all the day rates and other pay) divided by the total hours you worked that week. Overtime for hours over 40 is generally half of that regular rate again, since the day rate already paid the straight-time part of those hours. For example, if you earn $240 a day for five 10-hour days ($1,200 for 50 hours), your regular rate is $24 an hour, and you are owed an extra $12 for each of the 10 overtime hours, or $120.
• Some states, such as California, require daily overtime too, so a long day may trigger overtime even if the week is short.
• If a day rate is called a “bonus,” “stipend” or “per diem” but is based on work done, it generally counts in the regular rate. Genuine travel reimbursement is different. See Driving for Work.

Piece rates

• A piece rate pays per unit: per square foot installed, per door hung, per bundle of shingles or per pound.
• Employers must make sure that total pay for the week, divided by all hours worked, is at least minimum wage. If piece pay falls short, the employer must make up the difference.
• Overtime on piece rates: the regular rate is total piece earnings for the week divided by total hours worked. For hours over 40, you’re owed an additional half of that regular rate for each overtime hour (because the piece pay already covered the straight time). Alternatively, employers can pay a stated overtime rate if you agree in advance.
• Some states require separate pay for non-productive time, such as waiting for materials, travel between jobs or required breaks, which a piece rate alone doesn’t cover. Check your state.
• Deductions for mistakes, rework or tools can make pay fall below minimum wage or overtime, and may be illegal. See Tool Allowances & Paying for Your Own Tools and Wage Theft.

Salary

• A salary is a fixed amount per week or other period. Being paid a salary does not by itself make you exempt from overtime.
• For executive, administrative and professional workers to be exempt under the federal white-collar rules, three things must be true: they are paid on a salary basis, the salary is at least the federal minimum (currently $684 a week, or $35,568 a year, after a court struck down a higher 2024 level; this level has changed several times, so check the Department of Labor), and their job duties meet the exemption tests. Title and pay are not enough.
• Many trades jobs, such as laborers, carpenters, electricians, equipment operators, drivers and helpers, do not meet the duties test even when paid a salary. They are entitled to overtime. See Misclassification.
• A salaried non-exempt employee is paid a fixed salary for a set number of hours (such as 40) and must receive overtime pay for extra hours. The regular rate is the salary divided by the hours it is meant to cover.
• Some highly paid workers can be exempt under other tests, and some states set higher salary levels. Check state law.
• Exempt employees generally can’t have their salary reduced for the quality or quantity of work, but pay deductions rules are complex.

Common problems

• “Straight time for all hours.” Paying the same rate for overtime hours is illegal for non-exempt workers.
• “The day rate covers everything.” It doesn’t cover overtime.
• Labeling a worker as a contractor or salaried manager to avoid overtime.
• Unpaid time: not paying for travel between sites in the same day, waiting, loading the truck, safety meetings or required training. See Show-Up Pay.
• Adjusting hours to hide overtime, or paying part of overtime “off the books.”
• Prevailing wage jobs have their own rules. See Prevailing Wage.

Protect yourself

• Keep your own record of days and hours worked, the work you did, your pay and any deductions, with a notebook, an app or photos of timesheets. Employers must keep records, but yours can fill gaps. See Payday Laws.
• Ask for pay details in writing: the rate, how overtime is figured and who counts as the employer.
• Check your pay stub and compare it to your hours. See Small Claims for Wages.
• Do the math: use the regular rate method above, or ask your state labor agency or the U.S. Department of Labor Wage and Hour Division (1-866-487-9243) to check it.
• You’re protected from retaliation for asking about pay or filing a claim. See Where to Get Help and Wrongful Termination.
• Claims have time limits, generally two years under the FLSA, or three for willful violations, and state limits may differ. Act promptly.

Quick checks

• I know whether I’m an employee or really a contractor
• I know how my regular rate is figured, and I get overtime for hours over 40
• Total pay divided by total hours is at least the minimum wage, including piece-rate weeks
• My salary, if I have one, meets both the pay level and the duties test for any exemption
• I keep my own record of days, hours and pay
• I know where to go for help with a wage problem

Last updated: October 4, 2026