4th Circuit Upholds Piece-Rate Pay System for Turkey Loaders

Takeaway: Employers should ensure that compensation systems are clearly communicated and documented in offer letters, onboarding materials, policies, trainings, and pay stubs — especially for piece-rate employees.

A federal appeals court held that a turkey producer had correctly calculated and paid wages to a turkey loader because he was properly classified as a piece-rate employee rather than an hourly wage worker, affirming summary judgment for the employer in the 4th U.S. Circuit Court of Appeals. 

The case involved overtime claims under the Fair Labor Standards Act (FLSA) and various wage claims under the North Carolina Wage and Hour Act (NCWHA), including a payday claim for alleged failure to pay all promised hourly wages and overtime on the regular payday, and a notice claim alleging the employer did not properly inform the plaintiff of the compensation system or provide written policies regarding wages as required by state law.

Fact Sheet: What to Know About Overtime Under the FLSA

The plaintiff, a night-shift turkey loader, alleged that the employer failed to pay promised hourly wages and overtime. The central legal question was whether the plaintiff was an hourly or piece-rate employee.

The plaintiff’s job involved catching and loading turkeys onto trucks for transport to slaughter facilities. Some loaders also performed tasks such as fueling, sanitizing, and washing trucks before loading. Employees tracked their hours using a punch clock, and pay stubs included line items for overtime hours, load trips, and attendance hours. The plaintiff argued that he was promised an hourly wage and overtime at time-and-a-half, but the employer maintained that compensation was based on a per-load rate, as stated in the signed offer letter.

Related Article: Offer Letters: Start Employment Relationships Off Right

The district court granted summary judgment on the plaintiff’s FLSA claims, finding the plaintiff was a piece-rate employee and that the employer properly calculated and paid overtime according to the FLSA’s piece-rate regulations. It also dismissed the NCWHA claims on the grounds that overtime pay is governed exclusively by the FLSA for covered employees and the plaintiff was not owed additional hourly wages or notice beyond what he received.

On appeal, the 4th Circuit reviewed the lower court’s dismissal and summary judgment. The appellate court agreed that overtime claims must proceed under the FLSA, not the NCWHA and found no reversible error in dismissing the state payday and notice claims. 

The 4th Circuit explained that the NCWHA’s payday provision requires employers to pay all wages due on the regular payday, and the notice provision requires employers to inform employees at the time of hiring about promised wages and payment details, and to make written policies available. The court found that the payday claim for overtime was not separate from the FLSA claim and must proceed under federal law, not state law. The plaintiff’s payday claims for promised hourly wages failed because discovery showed he was paid on a piece-rate basis, not hourly. The court also found that the employer met the notice requirements by providing an offer letter and pay stubs documenting the compensation system.

Regarding the FLSA claim, the court explained that the FLSA does not require employers to pay employees on an hourly basis. Instead, employers may use a piece-rate system, provided that overtime is properly calculated. The plaintiff had signed an offer letter specifying a load rate, and pay stubs consistently reflected piece-rate compensation. Several employees stated they understood their pay was based on the number of loads, not hours worked.

For piece-rate employees, the regular rate is determined by dividing total weekly earnings by the number of hours worked. Overtime pay is then calculated at an additional half-time rate for hours worked over 40 in a week. The court reviewed the plaintiff’s pay records and found that the employer correctly calculated and paid overtime in accordance with FLSA regulations governing piece-rate compensation.

The plaintiff also argued that the employer improperly shifted hours between workweeks and failed to compensate for pre-shift duties. The court found no evidence of improper shifting of hours or underpayment. While some opt-in plaintiffs described performing pre-shift tasks without compensation, the record did not show that the named plaintiff regularly performed such tasks. 

The FLSA regulations allow piece-rate pay to cover both productive and unproductive hours — such as waiting, traveling, or preparatory tasks — if there is a mutual understanding between the employer and the employee that the piece-rate compensation is intended to cover all hours worked. Without such an agreement, employers must pay at least the minimum wage for unproductive hours, and overtime must be calculated accordingly. In this case, the court also found a mutual understanding that piece-rate pay covered all hours worked, including nonproductive time, as reflected in the employer’s practices and by the absence of any agreement to pay a lower rate for nonproductive hours.

The 4th Circuit affirmed the district court’s orders, highlighting the importance of clear compensation agreements, accurate recordkeeping, and consistent communication with employees about pay practices.

Figueroa v. Butterball LLC, 4th Cir., No. 24-1861 (Jan. 13, 2026).

Natalie F. Bare is an attorney with Greenberg Traurig in Philadelphia.