STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

April 25, 1969

Roland E. Grosshans
State's Attorney, Fall River County
Hot Springs, South Dakota 57747

OFFICIAL OPINION NO. 69-42

Deductions for food and lodging may be credited toward minimum wage

Dear Mr. Grosshans:

We are in receipt of your request for an official opinion regarding Senate Bill #62 (Minimum Wage Law) passed by the 1969 Legislature, which amends SDC 1960 Supp. 17.0607, SDCL 1967 60-11-3.

The specific question you have asked is:

"In applying the new minimum wage law of $1.00 per hour, will it be possible to consider board and room furnished by the employer toward the fulfillment of this obligation, and if so, on what basis?"

The original South Dakota Minimum Wage Law was passed in 1923. The law was first amended in 1931. The amendment provided that the minimum wage should "be paid in cash or by check."

The law, as amended, was the basis of an Attorney General's opinion on this same question (1937-38 AGR 746). The Attorney General there, referring to the 1931 amendment, stated:

"It seems obvious that the only apparent purpose of the amendment would be to make plain the intent of the legislature that the charges for board should not be included as a part of the minimum wage of twelve dollars per week, but that the wage specified should be paid 'in cash or by check.' This being the plain import of the statute, your question is answered in the negative."

The law was again amended in 1943. The amendment, among other things, deleted the clause "to be paid in cash or by check" and in place thereof inserted the clause "to be paid in money."

The law was again amended in 1964 and 1966, however, the particular clause relating to payment in money was not changed.

The latest amendment made at the 1969 Session, which will become effective July 1, 1969, raised the minimum wage to $1.00, however, it also dropped the clause "to be paid in money." It is well known that the deletion of code material by the Legislature is intended to have just as much effect as additions to the Code. It seems obvious that the deletion of the clause in question was intended to allow credits for board and lodging, etc., toward the fulfillment of the minimum wage obligation. The answer to your question would therefore be YES.

As an additional note, it should be pointed out that this opinion is in agreement with court decisions handed down under the Federal Minimum Wage Law. In those cases, the courts have ruled that these deductions are allowable only when they are reasonable. In determining reasonableness, the employer is expected to furnish these benefits to the employee at cost, and may not make a profit on them.

Respectfully submitted,

Gordon Mydland
Attorney General