24.16.2533 HOW DEDUCTIONS AFFECT THE REGULAR RATE
(1) Amounts deducted from cash wages - general.
(a) The word "deduction" is often loosely used to cover reductions in pay resulting from several causes:
(i) Deductions to cover the cost to the employer of furnishing "board", lodging or other facilities.
(ii) Deductions for other items such as tools and uniforms which are not regarded as "facilities".
(iii) Deductions authorized by the employee (such as union dues) or required by law (such as taxes and garnish-ments) .
(iv) Reductions in a fixed salary paid for a fixed workweek in weeks in which the employee fails to work the full schedule.
(b) In general, where such deductions are made, the employee's "regular rate" is the same as it would have been if the occasion for the deduction had not arisen.
(2) Computation where particular types of deductions are made. The regular rate of pay of an employee whose earnings are subject to deductions of the types just described is determined by dividing his total compensation before deductions by the total hours worked in the workweek.
(3) Salary reductions in short workweeks.
(a) The reductions in pay described in subsection (a) (iv) of this section are not, properly speaking, "deductions" at all. If an employee is compensated at a fixed salary for a fixed workweek and if this salary is reduced by the amount of the average hourly earnings for each hour lost by the employee in a short workweek, the employee is, for all practical purposes, employed at an hourly rate of pay. This hourly rate is the quotient of the fixed salary divided by the fixed number of hours it is intended to compensate. If an employee is hired at a fixed salary of $80 for a 40-hour week, his hourly rate is $2. When he works only 36 hours he is therefore entitled to $72. The employer makes a "deduction" of $8 from his salary to achieve this result. The regular hourly rate is not altered.
(b) When an employee is paid a fixed salary for a workweek of variable hours, the understanding is that the salary or guarantee is due the employee in short workweeks as well as in longer ones and "deductions" of this type are not made. Therefore, in cases where the understanding of the parties is not clearly shown as to whether a fixed salary is intended to cover a fixed or a variable workweek the practice of making "deductions" from the salary for hours not worked in short weeks will be considered strong, if not conclusive, evidence that the salary covers a fixed workweek.
History: Sec. 39-3-403, MCA; IMP, Sec. 39-3-405, MCA; Eff. 12/31/72.