Industrial homework or piecework is governed mainly by the Federal Fair Labor Standards Act (FLSA), which defines industrial homework (also called "piecework") as the production by any covered person in a home, apartment, or room in a residential establishment, of goods for an employer who permits or authorizes such production. The source of the goods may be the employer or elsewhere. Covered homework is subject to the FLSA's minimum wage, overtime, and recordkeeping requirements. Employers are required to provide workers with handbooks to record time, expenses, and pay information. Piece-rate pay is generally subject to income taxes on employees. Benefits are generally not required and vary by employer.
The performance of certain types of industrial homework is prohibited under the FLSA unless the employer has obtained prior certification from the Department of Labor. Restrictions apply in the manufacture of knitted outerwear, gloves and mittens, buttons and buckles, handkerchiefs, embroideries, and jewelry, if there are no safety and health hazards. The manufacture of women's apparel (and jewelry under hazardous conditions) is generally prohibited. Piece-rate workers perform jobs such as stuffing envelopes, assembling crafts, and more.
Homeworker employees must be paid the Federal minimum wage. This rate must be met regardless of whether the worker is paid by time, piece, job, incentive, or any other basis. The cost of tools, tool repair, or other similar requirements, may not be borne by the worker where such cost would reduce the wages paid below the required minimum wage or in any way reduce wages due for overtime hours.
Legal disputes have concerned situations where:
