The plaintiffs alleged that the compensation structure was actually an hourly compensation structure and that the employer used the piece-rate structure to avoid paying overtime.
An employer was paying its workers using a piece-rate compensation structure. The plaintiffs alleged that the compensation structure was actually an hourly compensation structure and that the employer used the piece-rate structure to avoid paying overtime. The analysis was complicated because employees worked in teams, and production was primarily measured by the production of the team. We used regression analysis to demonstrate that the measure of production was a better predictor of the amount an employee was paid than the number of hours worked, and thus, the piece-rate compensation structure was not an attempt by the employer to avoid paying overtime. The plaintiffs lost on summary judgment as well as on appeal.