A new system for calculating 'fair piece rates' came into effect in October 2004, superseding the old system under which you had to agree with your home workers a 'fair estimate' of the time the work would take. Under the new system you may choose to pay the minimum wage for every hour worked, or bring in a 'rated output' system. Under this system you must calculate the average production speed of the people doing this form of work, and use the resulting figure as the basis for calculating how long piece workers should take to do the work given them.
Provided you fulfil certain conditions (See Minimum wage), the average production speed may be used as the basis for calculating whether workers are paid the minimum wage. This is done by multiplying the number of hours piece workers should take to do the work by 120 per cent (previously 100 per cent).
