Goods or Facilities
Credits toward Minimum Wage
Under the FLSA, board, lodging,
and other facilities customarily furnished by the employer to his or
her employees are considered wages under certain circumstances. The payment of
wages as goods or services is allowed under Section 3(m) of the FLSA and
applies to situations where board, lodging, or other facilities are furnished
by the employer to the employee in
addition to stipulated wages and in situations where charges for board,
lodging, or other facilities are deducted
from stipulated wages. In these circumstances, the reasonable cost or
the fair value of the goods, or of furnishing the facilities must be added to
the employee’s cash wages before determining the regular rate of pay.
“Other
facilities” under this section must be something like board or lodging.
They may include such items as: - meals furnished at company restaurants or
cafeterias or by hospitals, hotels, or restaurants to their employees;
- meals,
dormitory rooms, and tuition furnished by a college to its student employees;
and
- housing furnished for dwelling purposes.
Items that are primarily for the benefit or convenience of the employer, such as business-related travel expenses and necessary tools or uniforms used in the employee's work, are not considered other facilities.
NOTE: "Board, lodging, and other facilities" do not include travel expenses when an employee travels to conduct
business on behalf of his or her employer. When an employee is reimbursed
for expenses incurred on behalf of his or her employer, such payments are
not considered to be compensation for hours worked and are excluded from the
regular rate.
This Advisor cannot be used to
compute overtime due when meals, board, lodging, or other facilities are part
of an employee’s wages. Payment of wages other than cash is subject to
limitations and safeguards as explained in the regulations at 29 C.F.R.531.
Please review the regulations and contact your local Wage and Hour Division
office for more information on calculating overtime based on the regular
rate of pay for employees who receive board, lodging, or other facilities as
part of their wages.
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