Where deductions as described in Sec. 778.304(a)(5) are made for
disciplinary reasons, the regular rate of an employee is computed before
deductions are made, as in the case of deductions of the types in
paragraphs (a) (1), (2), and (3) of Sec. 778.304. Thus where
disciplinary deductions are made from a piece-worker's earnings, the
earnings at piece rates must be totaled and divided by the total hours
worked to determine the regular rate before the deduction is applied. In
no event may such deductions (or deductions of the type described in
Sec. 778.304(a)(2)) reduce the earnings to an average below the
applicable minimum wage or cut into any part of the overtime
compensation due the employee. For a full discussion of the limits
placed on such deductions, see part 531 of this chapter. The principles
set forth therein with relation to
deductions have no application, however, to situations involving refusal
or failure to pay the full amount of wages due. See part 531 of this
chapter; also Sec. 778.306. It should be noted that although an employer
may penalize an employee for lateness subject to the limitations stated
above by deducting a half hour's straight time pay from his wages, for
example, for each half hour, or fraction thereof of his lateness, the
employer must still count as hours worked all the time actually worked
by the employee in determining the amount of overtime compensation due
for the workweek.
[46 FR 7314, Jan. 23, 1981]
