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Published: 07/15/2016
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An employment contract is the main document that confirms the emergence of an employment relationship between an employer and a subordinate. There are certain requirements regarding its design and content established by current labor legislation.
In particular, these include the display of wage terms in the contract. It is worth considering how these conditions are included in the document, using the example of one such as the establishment of piecework wages.
- Legislative regulation
- Concept and scope
- Indication in the employment contract and sample filling
Legislative regulation of the issue
Article 11 of the Labor Code of the Russian Federation is the main document, which specifies all the standards related to this area. Articles 131 and 132 of the same Code are devoted to the forms by which work is paid.
The very procedure for the piecework form of remuneration involves several types of scheme when it is implemented.
What is a civil contract?
A GPC agreement is a transaction where, based on the agreement of the parties, their obligations and rights in relation to each other are established, changed or terminated in accordance with Articles 153, 154 and paragraph 1 of Art. 420 GK.
This type of agreement between a legal entity and an individual determines their relationship related to the result of the work. In this case, the parties do not enter into an employment relationship; in relation to each other, they are the customer and the contractor.
A civil law contract is concluded according to the rules of the Civil Code and its main difference from an employment contract is the ability to prescribe any conditions that do not contradict the law and suit both parties. This rule is prescribed in Art. 421 Civil Code.
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Indirect view
Relevant if it is impossible to accurately measure the contribution made by a specific employee to the production process at the enterprise. This option is used when formalizing relationships with subordinates servicing equipment and workplaces. Calculations are made based on the following recommendations:
- Using indirect piecework pricing. It is multiplied by the total amount of work performed by the subordinates for whom the service is organized.
- By dividing the standard rate for the tariff for employees by the general production rate typical for servicing places.
Organizing a continuous workplace makes it easier to calculate bonus payments.
Piece-premium variety
The worker is awarded bonuses if certain conditions are met:
- a large number of products produced;
- good level of work quality;
- exceeding plans.
The system provides an incentive to increase the quality and quantity of work and the overall level of productivity. The number of defects is less, the same applies to labor costs.
About the advantages and disadvantages
It is difficult to imagine a person’s life and work without such a term as transactions. This means that any work performed at a particular moment involves a reward.
The piecework form of work has positive and negative sides.
| Advantages | Flaws |
| It becomes easy for an employer to identify employees who are not conscientious enough in their duties. If a large number of violations are detected, the employment relationship is terminated. | Increased employee turnover of the enterprise. |
| A plan of income and expenses is drawn up for the enterprise with maximum accuracy. It is easier to fulfill the requirements from documents approved earlier. | Work is not paid if its quality is low. But everything is redone at the manager’s own expense. |
| An opportunity for subordinates to earn more income from their main place of work. There is no need to look for additional part-time work. | There are no guarantees that earnings will always be stable. For example, work cannot be carried out in the absence of timely supplies of equipment and materials. |
| Financial incentives help increase motivation to increase productivity. | The employee is interested in increasing the quantity, because of which the quality may suffer. |
| The appearance of defects in equipment leads to the fact that the enterprise operates with downtime. Until the problems are corrected, periods of time are not subject to payment, which also negatively affects citizens. |
If the amount of work is easy to determine at the enterprise, piecework wages will bring more benefits.
Normative base
Piecework wages, like any other labor relations, are regulated by a certain regulatory framework that both employees and their employers must follow.
Based on paragraph 1 of Art. 135 of the Labor Code, wages are set for an employee upon concluding an employment contract with him on the basis of the payment system that is established in the organization or enterprise.
Art. 8 of the Labor Code provides for the right and obligation of organizations to issue local acts that extend to labor relations within the organization. However, they must not contradict the current Labor Code and go beyond the competence of the company.
Regulation of piecework (as well as time-based) payment is also carried out by other norms of the Labor Code contained in Chapter 21, general principles and principles of labor law and other norms regulating the issue under consideration in general.
A more detailed source of legal regulation is the local act of the organization, which establishes the rules for piecework and payment for it. This is the Regulation on piecework wages, on the basis of which the employee’s salary is set, calculated and issued.
Work schedule for piecework wages
Typically, the work schedule is established in individual or collective labor contracts and local regulations. The documents contain the following information:
- standard working week;
- irregular work option;
- duration of daily duties;
- start and end times of each shift;
- breaks;
- total number of shifts during the day;
- the procedure for alternating working days with non-working days.
Payroll calculation under the piecework wage system
The local act of the enterprise in this case also regulates the main provisions. The general salary formula for such employees is as follows:
ZP = Kp * Sed
Salary – salary before taxes are deducted.
Kp – units of production produced at a certain time.
Sed – the cost of 1 unit of finished product.
A more complex formula is used when using bonuses for fulfillment and exceeding plans.
ZP = Kp * Sed + P
P – final bonus depending on work results. Measured in fixed amounts. But it may depend on the number of products produced in excess of the norm.
With the progressive accounting option, two more indicators are added:
KPP – products produced in excess of the established plan.
Sedp – increased cost for products.
Find out what problems piecework actually solves in this video:
How to write it in the contract
Simple piecework wages - calculation of an employee’s income according to approved company rates. At the same time, production standards are approved - the number of products produced per hour or day. That is, a minimum is established that must be met.
For greater motivation, the piecework-premium option is used. With it, in addition to the salary, a bonus is awarded provided that the employee exceeds the norm and does not allow defects.
A sample piecework wage in an employment contract may look like this.
There are also piece-progressive and chord-premium options. The first option involves an increased tariff for manufactured products above the norm. The second one encourages completing work ahead of schedule, since they are paid extra for completing a complex complex ahead of schedule.
Piece rates: where and how to register them?
The condition of payment is necessarily included in employment agreements; this is stated in Article 57 of the Labor Code of the Russian Federation. But below only the following concepts are mentioned:
- incentives;
- allowances;
- salary.
Piece rates are not described in any way. That is, such a system may not be described in the text of the contract. But how, in this case, does the employee himself know what his remuneration is?
Article 135 of the Labor Code of the Russian Federation tells us that when resolving such issues, the manager himself makes the final choice depending on the system currently used. Below is a list of documents where such systems can be prescribed:
- local acts;
- the agreement itself;
- collective agreement.
Local acts deserve a separate discussion. They are accepted taking into account the opinions of their subordinates. The main thing is that the guarantees in these documents are no less than in the current labor legislation.
In other respects, managers receive complete freedom. The same applies to the choice of the system by which labor is paid.
The adoption of the Remuneration Regulation is the most common step in this case. The document is not required to be drawn up, but it makes life easier for both parties. Employees will have a more accurate idea of what their wages depend on.
Primary documents for calculation and payment of wages
The piece-rate regressive system is built in the opposite way - the price per unit of production is reduced if the production rate is exceeded. Such a system is designed to minimize the cost of storing products and optimize the process of activity as a whole. For example, in an assembly shop, toy robots are assembled. It takes more time to assemble a robot head than, for example, to assemble wheels. Therefore, during the day, more wheels will arrive at the warehouse than heads, and as a result, the wheels will lie as dead weight. What if the company stops producing these robots? And provided that the need for wheels disappears, the piece workers, if it is impossible to assign other work, will have to pay for downtime. The indirect system is designed to ensure that support staff are paid based on the productivity of the main workers.
Collective agreements and local acts
Employees must be familiar with the current regulations of the enterprise before they sign the document. After this, a signature is placed in confirmation of familiarization.
This stage is passed when drawing up any local acts; the rule also applies to collective agreements. The documents are reviewed before the contract is signed.
The contract itself stipulates that the piecework system is used. Next is a link to the Regulations on Payment, which becomes the basis for determining minimum labor prices.
Such formulations are not considered legal violations. Then, when making adjustments, there will be no need to draw up an additional agreement. It remains to ensure that the procedure for accepting documents is followed.
Duration of the GPC agreement
The specific validity period of the agreement is fixed in its corresponding paragraph, while the maximum term of the GPC agreement with an individual is not limited by law (Part 1 of Article 708, Part 1 of Article 781 of the Civil Code). Additionally, intermediate deadlines may be provided.
In practice, the customer and the contractor are interested in completing the work (providing the service) as quickly as possible and generating income. Therefore, although according to the law the period can be calculated in decades, it has reasonable limits. The duration is determined based on the actual ability to fulfill the terms of the contract.
Storage of contracts is determined by the provisions of Art. 23 of the Tax Code and Federal Law of December 6, 2011 No. 402-FZ and is 5 years.
