USMCA Workers Paid on a Non-Hourly Basis

Section 810.125 explains how to factor the wages of workers paid on a non-hourly basis into the average hourly base wage rate calculation. While the USMCA refers to the average hourly base wage rate, the Department recognizes that not all workers who perform direct production work are paid on an hourly basis. Given this reality, and to help ensure that the average hourly base wage rate calculation does not exclude workers who perform direct production work based solely on whether they are paid hourly, the Department interprets the USMCA as permitting workers paid on a basis other than hourly to be included in the average hourly base wage rate calculation. To do otherwise would in effect force a producer to convert to hourly status any worker it wants to include in its average hourly wage rate calculations. This promotes neither the USMCA’s purpose nor efficient business practices.

Accordingly, if any worker performing direct production work is compensated by a method other than hourly, such as a salary, piece-rate, or day-rate basis, the worker’s hourly base wage rate shall be calculated by converting the salary, piece-rate, or day-rate to an hourly equivalent. The Department will follow standard WHD practices in converting non-hourly wages to an hourly equivalent. WHD regularly does such conversions in the Fair Labor Standards Act (“FLSA”) context and for several other statutes it enforces. After performing the conversion, the hourly equivalent rate is then multiplied by the worker’s number of hours worked in direct production for purposes of calculating the average hourly base wage rate.

Subsection 810.125(b) provides examples of specific types of conversions using standard WHD practices where a salary, piece-rate, or day-rate wage is paid to a worker on a (1) weekly or bi-weekly, (2) semi-monthly, or (3) a monthly basis.

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