The Federal FLSA allows an employer to, under certain circumstances, count as wages “the reasonable cost … to the employer of furnishing such employee with board, lodging, or other facilities.” 29 U.S.C. § 203(m). The Department of Labor has just issued a new guidance document explaining the requirements for meal and lodging credits in the workplace under section 3(m) of the Fair Labor Standards Act (FLSA), as well as the proper method of accounting for this credit in calculating wages, with many examples involving home care workers.
Meal and Lodging Credits in the Workplace
The Q&A section answers such questions as:
What is a section 3(m) credit?
Under what circumstances may an employer claim the Section 3(m) credit for lodging?
What does it mean for lodging to be “regularly provided by the employer or similar employers”?
How do you determine if the employee “voluntarily accepted” the lodging?
What does is mean for lodging to be provided “in compliance with Federal, State, and Local Laws”?
What does it mean for an employee to receive the “primary benefit of the lodging” in the section 3(m) context?
When is housing “adequate” for purposes of whether an employer can claim a section 3(m) credit?How does an employer comply with the requirement to keep accurate records with regard to section 3(m)?
How does Section 3(m) apply if a live-in home care worker is a member of a union or subject to a collective bargaining agreement (CBA)?
How do you determine the amount of a section 3(m) credit?
What is the “reasonable cost” of the facilities?
And many more.
Employers in California should keep in mind that state and federal law are not the same with regard to meal and lodging credits in the workplace. State regulations limit the amount of credit employers can use to offset minimum wage obligations, and there must be a written agreement between the employer and the employee. Employers should also keep in mind that providing meals or lodging as part of the compensation could increase the employee’s regular rate of pay for overtime premium purposes.
If you have questions about the meals and lodging you receive from your employer, or if you provide meals and lodging to your employees as part of their compensation, speak with an employment attorney familiar with wage and hour issues as soon as practical.
Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.
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