The fair piece rate is the amount that allows an average worker to be paid the National Minimum Wage per hour if they work at an average rate.
The employer will have to carry out tests to establish the time it takes an average worker to complete the work. For example, if the tests show that for a particular job, the average worker (aged 25 or over) can complete ten pieces an hour, the employer must pay workers aged 25 or older at least 90p per piece in order to pay the current national living wage rate of £7.50 per hour (£7.50 x 120% divided by 10 pieces equals 90p).
The 120% calculation has been introduced to reflect that, while the average (mean) worker may complete the work that quickly, this means that 50% of workers will complete it more slowly and so be paid less than the NMW were the rate set at 100% of the NMW. The 120% calculation brings a higher proportion of piece rate workers under minimum wage protection.
Trade unions are experts at making sure workers are paid the NMW whatever work they do and wherever they work. If you are not a union member, browse our Union Finder tool to find out which union best suits your needs, and to discover more about organising to secure union recognition at your workplace.
You can also get advice on your right to be paid the NMW by calling the Acas Helpline on 0300 123 1100. With your consent, the Acas Helpline officer can refer your claim on to the National Minimum Wage enforcement team at HMRC.