(a) When no overtime is worked by the employees, section 3(m) and
this part apply only to the applicable minimum wage for all hours
worked. To illustrate, where an employee works 40 hours a week at a cash
wage rate of $1.60 an hour in a situation when that rate is the
applicable minimum wage and is paid $64 in cash free and clear at the
end of the workweek, and in addition is furnished facilities valued at
$4, no consideration need be given to the question of whether such
facilities meet the requirements of section 3(m) and this part, since
the employee has received in cash the applicable minimum wage of $1.60
an hour for all hours worked. Similarly, where an employee is employed
at a rate of $1.80 an hour and during a particular workweek works 40
hours for which he is paid $64 in cash, the employer having deducted $8
from his wages for facilities furnished, whether such deduction meets
the requirement of section 3(m) and subpart B of this part need not be
considered, since the employee is still receiving, after the deduction
has been made, a cash wage of $1.60 an hour. Deductions for board,
lodging, or other facilities may be made in nonovertime workweeks even
if they reduce the cash wage below the minimum, provided the prices
charged do not exceed the ``reasonable cost'' of such facilities. When
such items are furnished the employee at a profit, the deductions from
wages in weeks in which no overtime is worked are considered to be
illegal only to the extent that the profit reduces the wage (which
includes the ``reasonable cost'' of the facilities) below the required
minimum. Accordingly, in a situation when $1.60 an hour is the
applicable minimum wage, if an employee employed at a rate of $1.65 an
hour works 40 hours in a workweek and is paid only $54 in cash, $12
having been
deducted for facilities furnished to him, such facilities must be
measured by the requirements of section 3(m) and this part to determine
if the employee has received the minimum of $64 (40 hours x $1.60) in
cash or in facilities which may be legitimately included in ``wages''
payable under the Act. The same would be true where an employee is
furnished the facilities in addition to a cash wage of $54 for 40 hours
of work. In either case, if the ``reasonable cost'' to the employer of
legitimate facilities equals at least $10 the requirements of the Act
are met. Cf. Southern Pacific Co. v. Joint Council Dining Car Employees,
165 F. (2d) 26 (C.A. 9).
(b) Deductions for articles such as tools, miners' lamps, dynamite
caps, and other items which do not constitute ``board, lodging, or other
facilities'' may likewise be made in nonovertime workweeks if the
employee nevertheless received the required minimum wage in cash free
and clear; but to the extent that they reduce the wages of the employee
in any such workweek below the minimum required by the Act, they are
illegal.
