Is piecework still allowed?

Piecework is not prohibited in Germany, but it is subject to strict protective rules. It must not be influenced by external factors, and it is prohibited for certain groups of people.

What is meant by piecework?

Piecework is a working model in which employees are paid not by the hour but according to their output. The more they produce, the higher their pay.

How is piecework paid?

Under piecework, employees are paid according to their output. Instead of being paid an hourly wage or a salary, for example, piece-rate workers are paid depending on the number of items they produce.

Piecework in Germany: rules, pros and cons

Piecework – a look at a flexible pay model

By definition, piecework is a form of paid work that depends on the volume of work completed. In other words, people working on a piecework basis are paid for each item they produce, for example. The more they produce, the more they earn.

It also follows from this description that piecework is not necessarily suitable for every type of work. The work performed has to be assessed against clear criteria, such as the number of items produced. But length, weight and volume are often used as criteria as well.

Piecework can be used in a car factory, for example. When it comes to fitting car doors, workers can be paid for each door they install. If a worker works faster and fits more doors, they earn correspondingly more.

What is allowed under piecework?

Piecework is, however, tied to strict conditions. From an employment law perspective, a piecework process must be …

- … repeatable. This means that not only the activity itself, but also the time it takes must be repeatable.

- … precisely measurable. The quantity produced must therefore be possible to weigh, count or measure.

- … ready for piece rates. This means the work processes have been optimised to the point where workers can reliably handle them at the required quality.

- … independent of external factors. Workers must be able to set their own pace.

Important!

Because piecework has to be independent of external factors, assembly line work does not count as piecework. The reason is that on an assembly line the pace is dictated by the line itself.

When is piecework prohibited?

These conditions also point to certain limits of piecework. Above all, that includes unreasonable performance pressure. If the required pace is too high or workers are under enormous physical strain, piecework is not suitable for everyone.

For some groups of people, piecework is even prohibited by law. The German Maternity Protection Act (Mutterschutzgesetz), for example, states that piecework is prohibited for pregnant women and breastfeeding mothers. The same applies to young people covered by the German Youth Employment Protection Act (Jugendarbeitsschutzgesetz), including young people in vocational training, and to driving personnel. These groups are placed under stricter statutory protection because the risk of overexertion and lasting damage to health is too high. In addition, there is an age limit of 54 for piecework. Employees older than that may no longer work on a piecework basis.

But here, too, there are exceptions: if the pace or the type of piecework has no effect on the health of pregnant women and the supervisory authority has approved it, pregnant women may work on piece rates as well. Young people can also work on a piecework basis. To do so, however, it must take place as part of vocational training and the tasks must have been checked in advance by a qualified expert.

A worker in a modern factory operating a large machine with a display. He is wearing a black jumper and working with concentration in a workshop environment, surrounded by wooden panels and equipment, beneath a lit industrial hall ceiling.

Money-based piece rate (Geldakkord) vs. time-based piece rate (Zeitakkord)

Money-based piece rate

A money-based piece rate means that a fixed sum of money is set for each item produced. In this form of piecework, the employee's pay therefore depends on the volume of work.

The calculation is:

Rate per item x output = wage

Time-based piece rate

The time-based piece rate is the more popular variant. Pay under a time-based piece rate is calculated from working hours and the number of items produced. Unlike the money-based piece rate, here the company specifies how much output should be achieved per hour or per shift and sets what is known as the piece rate benchmark (Akkordrichtsatz). In other words, the company sets a target value. If the employee achieves more than the target, they earn more. It works the other way round too: if they stay below the required target, they are paid less.

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Advantages and disadvantages of piecework

Piecework offers both opportunities and challenges for employees and employers. While it creates incentives for higher productivity on the one hand, it carries risks at the same time.

Advantages of piecework

Performance incentives: Because earnings depend directly on output, workers are often more motivated to work faster and more efficiently.

Higher productivity: Companies benefit from increased productivity. Employees have a stronger incentive to produce more units.

Transparent pay: The pay is easy for employees to follow.

Flexibility for employees: in some cases employees can arrange their working hours more flexibly, because they are measured only by the units they produce.

Disadvantage of piecework

Quality risks: Focusing on quantity can mean that the quality of the work suffers. Employees may work less carefully in order to increase their production rate.

High pressure and stress: The pressure to deliver consistently high output can lead to increased stress and the health problems that come with it.

Potential exploitation: In some cases employers might set the production target too high. That makes it difficult for employees to earn a reasonable wage.

Risk of overload: The constant motivation to earn more can push employees into overtime. With too much overtime they overwork themselves. In the long run this can damage their health.

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An industrial laser cutting machine in action, cutting a metal part bearing the word 'clockin'. In the background, workers in a workshop can be seen operating modern machinery.

Piecework and time tracking

The statutory requirements on working hours and time tracking have to be met in piecework as well. In Germany, the German Working Hours Act (Arbeitszeitgesetz, ArbZG) sets out how long employees may work and what rest periods they are entitled to. These rules apply regardless of whether people are paid by the hour or on piece rates.

How does time tracking work in piecework?

Employers are obliged to record their employees' working hours, and that includes piecework. This protects employees and makes it possible to check compliance with the ArbZG. You can read more about the obligation to track working time here.

To keep track of the statutory requirements that apply to your employees, we recommend clockin. The app for digital time tracking helps you keep an eye on workload and maximum working hours.

With clockin your employees can record their working hours easily on mobile via the app. The app also lets you take statutory requirements into account. You can set the maximum number of hours individually for each employer. That way you always keep an overview of their workload.

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Which laws must be observed in piecework?

Maximum working hours: Under the ArbZG, piece-rate workers may also work a maximum of 8 hours per day. Working hours can be extended to up to 10 hours. A balance has to be achieved within six months. This balance ensures that average working hours amount to 8 hours.

Break rules: After 6 hours of work a break of at least 30 minutes is required, and after 9 hours a break of at least 45 minutes.

Rest periods: There must be at least 11 hours of rest between two working days or assignments, so that employees can recover.

Sunday and public holiday rest: Work on Sundays and public holidays is generally prohibited, unless specific exceptions apply.

Minimum wage: The minimum wage has to be observed in piecework as well. That means the piece rate must ensure that pay does not fall below the minimum wage for the hours actually worked.

What piecework means today

Piecework is still relevant today, particularly in certain industries and under specific conditions. In industrial production, and above all in mass manufacturing, piecework continues to play an important role. Here efficiency and high productivity are decisive for staying competitive. Piecework is also still widespread in the skilled trades and the construction industry. There, a lot of similar tasks often have to be completed.

However, there are also limits and changes that affect how important piecework is. Higher demands on quality and customer satisfaction mean that piecework is used less in areas where precision and quality are decisive. Instead, companies there increasingly rely on pay models that also reward qualitative performance. In addition, stricter employment law rules and stronger protection for employees have tightened the conditions for piecework.

Finally, increasing automation plays an important role: many production processes that used to be based on human piecework are now handled by machines, which reduces the need for human labour in these areas.

Within the statutory framework, piecework is a good way to give employees flexibility. Even so, the enormous pressure and stress that piece-rate workers carry should not be underestimated. And with an industry that now places a lot of value on quality, we cannot call this working model dead, but we can call it outdated.

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