|- FLSA Section 14(c) Advisor|
Crediting of Facilities and Special Minimum Wage (SMW) Issues Under FLSA Section 14(c)
Wages may take the form of cash or facilities (such as meals, lodging and transportation). Section 3(m) of the FLSA permits an employer, under conditions specified in Regulations 29 CFR Part 531, to count toward its special minimum wage obligations, the reasonable cost of furnishing board, lodging or other facilities that are customarily furnished to employees. When wages take the form of board, lodging or other facilities, employers are subject to the additional record keeping requirements detailed in Regulations 29 CFR Part 516.27.
In order for the employer to take credit toward the SMW, the facilities being furnished must be primarily for the benefit of the employee and their costs would not otherwise be incurred by the employer. In addition, any contribution towards the costs of providing the facilities, either by the workers with disabilities or any third party, must be deducted when determining the employers reasonable cost of furnishing the facilities.
The following are examples of costs a facility might incur that could be directly related to providing room and board and could be credited toward wage obligations to the extent the costs are incurred to the benefit of the workers with disabilities and would not otherwise be incurred by the employer:
The following examples are not wage payments and may not be credited toward wage obligations:
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