(a)Section 7 requires that the employee receive compensation for overtime hours at “a rate of
not less than one and one-half times the regular rate at which he is employed.” When overtime is worked by an employee who receives the whole or part of his or her
wage in facilities and it becomes necessary to determine the portion of wages represented
by facilities, all such facilities must be measured by the requirements of section 3(m) and subpart B of this part. It is the Administrator's opinion that deductions may be made, however, on the same
basis in an overtime workweek as in nonovertime workweeks (see § 531.36), if their purpose and effect are not to evade the overtime requirements of the Act
or other law, providing the amount deducted does not exceed the amount which could
be deducted if the employee had only worked the maximum number of straight-time hours
during the workweek. Deductions in excess of this amount for such articles as tools or other articles
which are not “facilities” within the meaning of the Act are illegal in overtime workweeks
as well as in nonovertime workweeks. There is no limit on the amount which may be deducted for “board, lodging, or other
facilities” in overtime workweeks (as in workweeks when no overtime is worked), provided
that these deductions are made only for the “reasonable cost” of the items furnished. These principles assume a situation where bona fide deductions are made for particular
items in accordance with the agreement or understanding of the parties. If the situation is solely one of refusal or failure to pay the full amount of wages
required by section 7, these principles have no application. Deductions made only in overtime workweeks, or increases in the prices charged for
articles or services during overtime workweeks will be scrutinized to determine whether
they are manipulations to evade the overtime requirements of the Act.
(b) Where deductions are made from the stipulated wage of an employee, the regular rate
of pay is arrived at on the basis of the stipulated wage before any deductions have
been made. Where board, lodging, or other facilities are customarily furnished as additions
to a cash wage, the reasonable cost of the facilities to the employer must be considered
as part of the employee's regular rate of pay. See Walling v. Alaska Pacific Consolidated Mining Co., 152 F.2d 812 (9th Cir. 1945), cert. denied, 327 U.S. 803.
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