Piece Rates – still legal

Mark Twain is often mis-quoted as saying “the reports of my death are greatly exaggerated”.  And so, it is with piece rates too. 

While there have been significant changes, piece rates are still quite legal under the Horticulture Award – but not everybody knows that!

Don’t believe everything you read in the papers

Despite inaccurate media you might have seen, piece rates as a means of payment for farm work are still legal. In April of 2022 there were some significant rule changes under the Horticulture Award that impacted piece rates as a method of paying wages, but they certainly did not change their legal status.

The main change implemented at the time was to provide for a minimum wage to be paid to your workers, regardless of their productivity. If they are a slow fruit picker they must now still be paid the minimum wage they would otherwise be entitled to if being paid hourly. However, offering a piece rate to encourage fast workers to maintain a high level of productivity not only remains legal, but is maintained by farms to encourage and retain experienced, productive workers who can earn much more than the hourly rate.

Casual workers and the DCM (Don’t Come Monday)

One important fact that farms sometimes overlook when considering whether to offer piece rates and the implications of the minimum wage – if the casual worker is not fast enough to justify the minimum wage you must pay them, you are quite entitled to discontinue their employment. As with any industry, if a worker is no good at their job they are unlikely to keep it. And as a casual worker their job can stop at any time without notice. So, if they are too slow and you don’t think their speed will improve, you can choose not to offer them any more work.

Hourly paid or piecework – not an easy choice

Although farmers now have greater clarity about how piece rates must be calculated, many find the administration of doing so onerous so have chosen to offer only hourly-paid work. But if you go down that path, experienced, productive workers may seek other farms who still offer piece rates in order to earn more.

It is important that potential employees understand which payment method is being offered. If you are offering piecework the rate must be clear, as well as the task the worker must undertake, and what measurement is used. You must provide that information in writing to the worker (electronically is acceptable) before they start on that task. There are other records you must keep as well such as hours worked, even if paying by piecework, and the method by which you arrived at the piecework rate.

As has been the case for a very long time, you must give your workers a written pay slip with their earnings – again, electronically is fine. That pay slip must include the piece rate, the quantity of units picked (or whatever the task was), and the hours worked. The pay slip must also make it clear who the employer is. Whether you are a farmer directly hiring workers or a labour hire contractor supplying workers to a farm, the pay slip must be clear which is the employer. In either case, the piece rate information provided before starting must come from the employer, whether contractor or farmer.

Check the facts first

So, don’t be confused by poor journalism, or your neighbours who only think they know, check out the Fair Work Ombudsman’s website if you have any questions about piecework. If you belong to an industry representative body they will likely have professional advice specific to your farm – so use them. 

And make sure your employment information is clear to your potential workers, they themselves are often unsure and sometimes armed with inaccurate information from agitators. 

If they feel they can trust a farm they are considering working for and start with a positive attitude, they are far more likely to be a valuable worker over a longer period and everybody wins.