U.S. Department of Labor
FLSA Overtime Calculator Advisor
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.
