[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: 29CFR779.17]

[Page 465-466]
 
                             TITLE 29--LABOR
 
         CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR
 
PART 779_THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR 
SERVICES--Table of Contents
 
                            Subpart A_General
 
Sec. 779.17  Wage and wage payments to tipped employees.

    Section 3(m) of the Act provides that as used in the Act, ``wage'' 
paid to any employee:

    includes the reasonable cost, as determined by the Secretary of 
Labor, to the employer of furnishing such employee with board, lodging, 
or other facilities, if such board, lodging or other facilities are 
customarily furnished by such employer to his employees: Provided, That 
the cost of board, lodging, or other facilities shall not be included as 
a part of the wage paid to any employee to the extent it is excluded 
therefrom under the terms of a bona fide collective-bargaining agreement 
applicable to the particular employee: Provided further, That the 
Secretary is authorized to determine the fair value of such board, 
lodging, or other facilities for defined classes of employees and in 
defined areas, based on average cost to the employer or to groups of 
employers similarly situated, or average value to groups of employees, 
or other appropriate measures of fair value. Such evaluations, where 
applicable and pertinent, shall be used in lieu of actual measure of 
cost in determining the wage paid to any employee. In determining the 
wage of a tipped employee, the amount paid such employee by his employer 
shall be deemed to be increased on account of tips by an amount 
determined by the employer, but not by an

[[Page 466]]

amount in excess of 50 per centum of the applicable minimum wage rate, 
except that in the case of an employee who (either himself or acting 
through his representative) shows to the satisfaction of the Secretary 
that the actual amount of tips received by him was less than the amount 
determined by the employer as the amount by which the wage paid him was 
deemed to be increased under this sentence, the amount paid such 
employee by his employer shall be deemed to have been increased by such 
lesser amount.


As explained in part 531 of this chapter, section 3(m) of the Act 
governs the payment of wages required by the Act, including payment in 
other than cash and in tips. Part 531 of this chapter contains the 
regulations under which the reasonable cost or fair value of such 
facilities furnished may be computed for inclusion as part of wages 
required by the Act. Section 3(m) provides a method for determining the 
wage of a ``tipped employee'' and this term as defined in section 3(t) 
of the Act ``means any employee engaged in an occupation in which he 
customarily and regularly receives more than $20 a month in tips''. 
Regulations under which wage credits are permitted on account of tips 
paid to ``tipped employees'' are also contained in part 531 of this 
chapter.