Can my employer pay me in something other than cash?

The federal Fair Labor Standards Act (FLSA) requires employers to pay employees their wages in cash or "facilities."

Question: I work in the housekeeping department of a hotel chain, and I earn the minimum wage. Last week, our manager announced that there would be a change in our paychecks. Rather than paying us for all of our hours, the hotel will now be giving us $50 of our paycheck on a credit, which we can use only in the hotel's stores. (The hotel is affiliated with a restaurant chain and has a large gift shop as well.) The manager explained that this would make it easier for us to eat our meals in the hotel restaurant and to buy branded merchandise from the store. But I don't want a t-shirt with the hotel's name on it; I want my whole paycheck. Is this legal?

Answer: The short answer is no. The federal Fair Labor Standards Act (FLSA) requires employers to pay employees their wages in cash or "facilities." A facility is lodging, board, meals, transportation, or something else that is customarily furnished to employees, primarily for the benefit of the employees. An employer that pays employees partly in "facilities" may deduct only the reasonable cost of such facilities. Some states also set a dollar limit on the amount an employer can deduct for these purposes (for example, for the cost of providing a meal or lodging). In your case, however, these rules don't apply. Your employer is not providing a "facility" as defined by the FLSA. Instead, your employer is basically paying you in scrip: a form of currency that can be used only the "company store." This practice was outlawed long ago. Credit at the hotel restaurant and gift shop is not something customarily furnished to employees in your industry, nor is it primarily for your benefit. This is a violation of the minimum wage laws, plain and simple. If your employer persists, consider filing a wage claim or complaint with your state's labor department.

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