Industrial Homework or Piecework Law and Legal Definition

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:

  1. Employer improperly treats homeworkers as "independent contractors".
  2. Employer fails to maintain required record of hours, production, etc., or fails to instruct the employee to record the required data in the DOL homeworker handbook.
  3. Employer fails to assure that homeworker paid on piece rate basis has earned the minimum wage.
  4. The employer must bear the cost of tools purchased as well as tool maintenance and repair to the extent that these costs cut into the minimum wage or overtime wages required.
  5. Employer fails to count as hours worked preparatory and concluding activities, time spent at the shop, travel time and training time.
  6. Employer fails to ensure proper certification for the restricted industries.