[Code of Federal Regulations]
[Title 29, Volume 3]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR531.40]

[Page 171]
 
                             TITLE 29--LABOR
 
         CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR
 
PART 531_WAGE PAYMENTS UNDER THE FAIR LABOR STANDARDS ACT OF 1938
--Table of Contents
 
                        Subpart C_Interpretations
 
Sec. 531.40  Payments to employee's assignee.

    (a) Where an employer is directed by a voluntary assignment or order 
of his employee to pay a sum for the benefit of the employee to a 
creditor, donee, or other third party, deduction from wages of the 
actual sum so paid is not prohibited: Provided, That neither the 
employer nor any person acting in his behalf or interest, directly or 
indirectly, derives any profit or benefit from the transaction. In such 
case, payment to the third person for the benefit and credit of the 
employee will be considered equivalent, for purposes of the Act, to 
payment to the employee.
    (b) No payment by the employer to a third party will be recognized 
as a valid payment of compensation required under the Act where it 
appears that such payment was part of a plan or arrangement to evade or 
circumvent the requirements of section 3(m) or subpart B of this part. 
For the protection of both employer and employee it is suggested that 
full and adequate record of all assignments and orders be kept and 
preserved and that provisions of the applicable State law with respect 
to signing, sealing, witnessing, and delivery be observed.
    (c) Under the principles stated in paragraphs (a) and (b) of this 
section, employers have been permitted to treat as payments to employees 
for purposes of the Act sums paid at the employees' direction to third 
persons for the following purposes: Sums paid, as authorized by the 
employee, for the purchase in his behalf of U.S. savings stamps or U.S. 
savings bonds; union dues paid pursuant to a collective bargaining 
agreement with bona fide representatives of the employees and as 
permitted by law; employees' store accounts with merchants wholly 
independent of the employer; insurance premiums (paid to independent 
insurance companies where the employer is under no obligation to supply 
the insurance and derives, directly or indirectly, no benefit or profit 
from it); voluntary contributions to churches and charitable, fraternal, 
athletic, and social organizations, or societies from which the employer 
receives no profit or benefit directly or indirectly.

                  Payment of Wages to Tipped Employees