The piece-rate pay plan is used by companies that pay their employees at least in part based on the number of units of production completed. To calculate wages under this method, multiply the rate paid per unit of production by the number of units completed in the workweek. An employer that uses this approach must still pay its staff for overtime hours worked; to calculate this, divide the total piece-rate pay by the hours worked, then add the overtime premium to the excess hours worked. An employer can avoid this extra calculation by computing wages earned during an overtime period using a piece rate that is at least 1.5 times the regular piece rate.

The employer could also have simply set the piece rate 50 percent higher for work performed during the overtime period, which would have been $1.13 ($0.75 × 1.5). In this example, the higher piece rate would have resulted in a slightly higher payment to the employee, since the person produced slightly more than the standard number of dolls during the period.