Plenty of trade crews are paid by the day. A helper might get $240 a day and a finisher $300, and nobody looks at a clock. Others are paid by the piece: so much a sheet of drywall, a square of shingles, a window. Both feel like they settle the question of overtime, because the pay is for the work, not the hours. Under federal law they do not.
The Labor Department’s Fact Sheet #23 puts it in one sentence: earnings may be figured on a piece-rate, salary, commission or other basis, but in all such cases the overtime due must be computed on the average hourly rate derived from those earnings. That average is the regular rate, and getting it wrong is the trap.
The rule in three lines
Two more rules close the usual escape hatches. Each workweek stands alone: you cannot average a 30-hour week with a 50-hour week (778.104). And the law does not require overtime for Saturdays, Sundays or holidays as such (Fact Sheet #23); a weekend premium is a pay practice, while the federal trigger is hours over 40.
Day rates
Section 778.112 covers a flat sum for a day’s work or for a particular job, paid without regard to the hours. Total the day rates for the week, divide by the hours actually worked, and the worker is owed an extra half of that rate for every hour over 40. The day rate already paid straight time for all the hours; the half-time is what is still due.
Say a concrete finisher’s helper earns $240 a day and works five 10-hour days:
| Day rates, 5 × $240 | $1,200.00 |
| Hours worked | 50 |
| Regular rate, $1,200 ÷ 50 | $24.00 |
| Half-time owed, $12 × 10 hours over 40 | $120.00 |
| Week’s pay | $1,320.00 |
Notice what that is: exactly $24 an hour for 40 hours plus $36 an hour for 10. A correctly paid day rate lands where an hourly wage with time and a half would.
“But the day rate is meant to cover the long days.” The regulations shut that door. A lump sum paid for overtime work without regard to the number of overtime hours does not count as an overtime premium, even if it equals or beats what hourly overtime would have paid (778.310). Building “overtime” into a flat day rate is exactly what that section describes.
Bonuses go in the pot. Extra pay given as an incentive for fast work counts toward the regular rate (778.207), and so do production bonuses (778.110 and 778.111). Say the same helper gets $100 for finishing a pour a day early. Now the week is $1,300 over 50 hours, a regular rate of $26, and $13 of half-time on each of the 10 overtime hours: $1,430.
Every hour counts, including the ones nobody thinks of as work. Back in the first week, with no bonus, say that helper also loaded at the shop and rode to the site for four more hours; the denominator is 54, not 50. The regular rate drops to $22.22, but the overtime hours rise to 14, and the half-time owed comes to $155.56 instead of $120. Which drives count is its own question; see Is Drive Time Paid?
Piece rates
Section 778.111 works the same way. Add the week’s piece earnings, any production bonuses, and any pay for waiting time or other hours worked; divide by all the hours worked; and pay an extra half of that rate for every hour over 40.
Say a drywall hanger earns $1,150 in piece pay for 46 hours of hanging, and you pay him $20 an hour for 4 hours of loading and shop time:
| Piece pay | $1,150.00 |
| Shop time, 4 hours at $20 | $80.00 |
| Total, over 50 hours worked | $1,230.00 |
| Regular rate, $1,230 ÷ 50 | $24.60 |
| Half-time owed, $12.30 × 10 hours | $123.00 |
| Week’s pay | $1,353.00 |
There is one alternative for piece work. If the worker agrees before the work is done, you may instead pay at least one and one-half times the piece rate for each piece produced during overtime hours, and no further overtime is due, provided the conditions in 778.418 are met, starting with a bona fide piece rate.
The states that count by the day
Federal law looks only at the week. Some states also look at the day, and the federal rules do not override them: where both apply, you must meet both (29 CFR 778.5).
California. Labor Code section 510 makes eight hours a day’s work. Hours over 8 in a workday, over 40 in a workweek, and the first 8 on the seventh day of work in a workweek are paid at no less than one and one-half times the regular rate; hours over 12 in a day, and over 8 on the seventh day, at no less than twice the regular rate. Say a California tile setter on a piece rate works four 10-hour days: 40 hours, no federal overtime, but 8 hours of daily overtime under section 510, unless the crew works under a valid alternative workweek schedule, which section 510 sets apart. The Labor Commissioner’s manual adds that piece-rate workers must be paid separately for rest and recovery periods and for other nonproductive time (Labor Code section 226.2, as the manual sets it out in section 49.2.1.4).
Alaska. Hours over 8 in a day or 40 in a week are paid at one and one-half times the regular rate, but the requirement does not apply to an employer with fewer than four employees in the regular course of business.
Nevada. An employee paid less than one and one-half times the minimum wage, which the Labor Commissioner’s 2026 bulletin puts at $18.00 an hour from July 1, 2026, earns overtime for more than 8 hours in a 24-hour period as well as more than 40 in a week.
Other states have their own rules, so check your state labor department before you set a pay plan.
Fixing a day-rate payroll
One thing this math does not settle is whether a day-rate worker is your employee at all; that is a separate test, covered in 1099 or W-2? Classifying Helpers Without Getting Burned.
General information, not legal or tax advice. Rules change and vary by state; check with the agency named above or a professional for your situation.