Service
Contract Act
Title 29, Code of Federal Regulations,
Part 4
Labor Standards for Federal Service Contracts
(29 CFR 4.167-4.168)
29 CFR 4.167 - Wage payments--medium
of payment.
The wage payment requirements
under the Act for monetary wages
specified under its provisions will be satisfied by the timely payment
of such wages to the employee either in cash or negotiable instrument
payable at par. Such payment must be made finally and unconditionally
and ``free and clear.'' Scrip, tokens, credit cards, ``dope checks'',
coupons, salvage material, and similar devices which permit the employer
to retain and prevent the employee from acquiring control of money due
for the work until some time after the pay day for the period in which
it was earned, are not proper mediums of payment under the Act. If,
as is permissible, they are used as a convenient device for measuring
earnings or allowable deductions during a single pay period, the employee
cannot be charged with the loss or destruction of any of them and the
employer may not, because the employee has not actually redeemed them,
credit itself with any which remain outstanding on the pay day in determining
whether it has met the requirements of the Act. The employer may not
include the cost of fringe benefits or equivalents furnished as required
under section 2(a)(2) of the Act, as a credit toward the monetary wages
it is required to pay under section 2(a)(1) or 2(b) of the Act (see
Sec. 4.170).
However, the employer may
generally include, as a part of the applicable minimum wage which it
is required to pay under the Act, the reasonable cost or fair value,
as determined by the Administrator, of furnishing an employee with ``board,
lodging, or other facilities,'' as defined in part 531 of this title,
in situations where such facilities are customarily furnished to employees,
for the convenience of the employees, not primarily for the benefit
of the employer, and the employees' acceptance of them is voluntary
and uncoerced. (See also Sec. 4.163(k).) The determination of reasonable
cost or fair value will be in accordance with the Administrator's regulations
under the Fair Labor Standards Act, contained in such part 531 of this
title. While employment on contracts subject to the Act would not ordinarily
involve situations in which service employees would receive tips from
third persons, the treatment of tips for wage purposes in the situations
where this may occur should be understood. For purposes of this Act,
tips may generally be included in wages in accordance with the regulations
under the Fair Labor Standards Act, contained in part 531. (See also
Sec. 4.6(q) and Sec. 4.163(k).)
The general rule under that
Act is that the amount paid a tipped employee by his employer is deemed
to be increased on account of tips by an amount determined by the employer,not
in excess of 40 percent of the minimum wage applicable under section
6 of that Act, effective January 1, 1980. Thus, the tip credit taken
by an employer subject to the Service Contract Act may not exceed $1.34
per hour after December 31, 1980. (See Sec. 4.163(k) for exceptions
in section 4(c) situations.) In no event shall the sum credited be in
excess of the value of tips actually received by the employee.[48 FR
49762, Oct. 27, 1983; 48 FR 50529, Nov. 2, 1983]
29 CFR 4.168 - Wage payments--deductions
from wages paid.
(a) The wage requirements
of the Act will not be met where
unauthorized deductions, rebates, or refunds reduce the wage payment
made to the employee below the minimum amounts required under the
provisions of the Act and the regulations thereunder, or where the
employee fails to receive such amounts free and clear because he ``kicks
back'' directly or indirectly to the employer or to another person for
the employer's benefit the whole or part of the wage delivered to him.
Authorized deductions are limited to those required by law, such as
taxes payable by employees required to be withheld by the employer and
amounts due employees which the employer is required by court order
to pay to another; deductions allowable for the reasonable cost or fair
value of board, lodging, and facilities furnished as set forth in Sec.
4.167; and deductions of amounts which are authorized to be paid to
third persons for the employee's account and benefit pursuant to his
voluntary assignment or order or a collective bargaining agreement with
bona fide representatives of employees which is applicable to the employer.
Deductions for amounts paid to third persons on the employee's account
which are not so authorized or are contrary to law or from which the
contractor, subcontractor or any affiliated person derives any payment,
rebate, commission, profit, or benefit directly or indirectly, may not
be made if they cut into the wage required to be paid under the Act.
The principles applied in determining the permissibility of deductions
for payments made to third persons are explained in more detail in Secs.
531.38-531.40 of this title.
(b) Cost of maintaining and
furnishing uniforms. (1) If the
employees are required to wear uniforms either by the employer, the
nature of the job, or the Government contract, then the cost of
furnishing and maintaining the uniforms is deemed to be a business
expense of the employer and such cost may not be borne by the employees
to the extent that to do so would reduce the employees' compensation
below that required by the Act. Since it may be administratively difficult
and burdensome for employers to determine the actual cost incurred by
all employees for maintaining their own uniforms, payment in accordance
with the following standards is considered sufficient for the contractor
to satisfy its wage obligations under the Act:
(i) The contractor furnishes
all employees with an adequate number of uniforms without cost to the
employees or reimburses employees for the actual cost of the uniforms.
(ii) Where uniform cleaning
and maintenance is made the responsibility of the employee, the contractor
reimburses all employees for such cleaning and maintenance at the rate
of $3.35 a week (or 67 cents a day). Since employees are generally required
to wear a clean uniform each day regardless of the number of hours the
employee may work that day, the preceding weekly amount generally may
be reduced to the stated daily equivalent but not to an hourly equivalent.
A contractor may reimburse employees at a different rate if the contractor
furnishes affirmative proof as to the actual cost to the employees of
maintaining their uniforms or if a different rate is provided for in
a bona fide collective bargaining agreement covering the employees working
on the contract.
(2) However, there generally
is no requirement that employees be
reimbursed for uniform maintenance costs in those instances where the
uniforms furnished are made of ``wash and wear'' materials which may
be routinely washed and dried with other personal garments, and do not
generally require daily washing, dry cleaning, commercial laundering,
or any other special treatment because of heavy soiling in
work usage or in order to meet the cleanliness or appearance standards
set by the terms of the Government contract, by the contractor, by law,
or by the nature of the work. This limitation does not apply where a
different provision has been set forth on the applicable wage determination.
In the case of wage determinations issued under section 4(c) of the
Act for successor contracts, the amount established by the parties to
the predecessor collective bargaining agreement is deemed to be the
cost of laundering wash and wear uniforms.
(c) Stipends, allowances
or other payments made directly to an
employee by a party other than the employer (such as a stipend for
training paid by the Veterans Administration) are not part of ``wages''
and the employer may not claim credit for such payments toward its
monetary obligations under the Act.