Section 3(m) applies to both of the following situations: (a) Where board, lodging, or other facilities are furnished in addition to a stipulated wage; and (b) where charges for board, lodging, or other facilities are deducted from a stipulated wage. The use of the word ``furnishing'' and the legislative history of section 3(m) clearly indicate that this section was intended to apply to all facilities furnished by the employer as compensation to the employee, regardless of whether the employer calculates charges for such facilities as additions to or deductions from wages. Sec. 531.30 ``Furnished'' to the employee.
The reasonable cost of board, lodging, or other facilities may be considered as part of the wage paid an employee only where customarily ``furnished'' to the employee. Not only must the employee receive the benefits of the facility for which he is charged, but it is essential that his acceptance of the facility be voluntary and uncoerced. See Williams v. Atlantic Coast Line Railroad Co. (E.D.N.C.). 1 W.H. Cases 289. Sec. 531.31 ``Customarily'' furnished.
The reasonable cost of board, lodging, or other facilities may be considered as part of the wage paid an employee only where ``customarily'' furnished to the employee. Where such facilities are ``furnished'' to the employee, it will be considered a sufficient satisfaction of this requirement if the facilities are furnished regularly by the employer to his employees or if the same or similar facilities are customarily furnished by other employees engaged in the same or similar trade, business, or occupation in the same or similar communities. See Walling v. Alaska Pacific Consolidated Mining Co., 152 F. (2d) 812 (C.A. 9), cert. denied, 327 U.S. 803; Southern Pacific Co. v. Joint Council (C.A. 9) 7 W.H. Cases 536. Facilities furnished in violation of any Federal, State, or local law, ordinance or prohibition will not be considered facilities ``customarily'' furnished. Sec. 531.32 ``Other facilities.''
(a) ``Other facilities,'' as used in this section, must be something like board or lodging. The following items have been deemed to be within the meaning of the term: 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; housing furnished for dwelling purposes; general merchandise furnished at company stores and commissaries (including articles of food, clothing, and household effects); fuel (including coal, kerosene, firewood, and lumber slabs), electricity, water, and gas furnished for the noncommercial personal use of the employee; transportation furnished employees between their homes and work where the travel time does not constitute hours worked compensable under the Act and the transportation is not an incident of and necessary to the employment.
(b) Shares of capital stock in an employer company, representing only a contingent proprietary right to participate in profits and losses or in the assets of the company at some future dissolution date, do not appear to be ``facilities'' within the meaning of the section.
(c) It should also be noted that under Sec. 531.3(d)(1), the cost of furnishing ``facilities'' which are primarily for the benefit or convenience of the employer will not be recognized as reasonable and may not therefore be included in computing wages. Items in addition to those set forth in Sec. 531.3 which have been held to be primarily for the benefit or convenience of the employer and are not therefore to be considered ``facilities'' within the meaning of section 3(m) include: Safety caps, explosives, and miners' lamps (in the mining industry); electric power (used for commercial production in the interest of the employer); company police and guard protection; taxes and insurance on the employer's buildings which are not used for lodgings furnished to the employee; ``dues'' to chambers of commerce and other organizations used, for example, to repay subsidies given to the employer to locate his factory in a particular community; transportation charges where such transportation is an incident of and necessary to the employment (as in the case of maintenance-of-way employees of a railroad); charges for rental of uniforms where the nature of the business requires the employee to wear a uniform; medical services and hospitalization which the employer is bound to furnish under workmen's compensation acts, or similar Federal, State, or local law. On the other hand, meals are always regarded as primarily for the benefit and convenience of the employee. For a discussion of reimbursement for expenses such as ``supper money,'' ``travel expenses,'' etc., see Sec. 778.217 of this chapter. Sec. 531.33 ``Reasonable cost''; ``fair value.''
(a) Section 3(m) directs the Administrator to determine ``the reasonable cost * * * to the employer of furnishing * * * facilities'' to the employee, and in addition it authorizes him to determine ``the fair value'' of such facilities for defined classes of employees and in defined areas, which may be used in lieu of the actual measure of the cost of such facilities in ascertaining the ``wages'' paid to any employee. Subpart B contains three methods whereby an employer may ascertain whether any furnished facilities are a part of ``wages'' within the meaning of section 3(m): (1) An employer may calculate the ``reasonable cost'' of facilities in accordance with the requirements set forth in Sec. 531.3; (2) an employer may request that a determination of ``reasonable cost'' be made, including a determination having particular application; and (3) an employer may request that a determination of ``fair value'' of the furnished facilities be made to be used in lieu of the actual measure of the cost of the furnished facilities in assessing the ``wages'' paid to an employee.
(b) ``Reasonable cost,'' as determined in Sec. 531.3 ``does not include a profit to the employer or to any affiliated person.'' Although the question of affiliation is one of fact, where any of the following persons operate company stores or commissaries or furnish lodging or other facilities they will normally be deemed ``affiliated persons'' within the meaning of the regulations: (1) A spouse, child, parent, or other close relative of the employer; (2) a partner, officer, or employee in the employer company or firm; (3) a parent, subsidiary, or otherwise closely connected corporation; and (4) an agent of the employer.