How Meal and Lodging Credits Can Affect Your Wages

Written by Galen T. Shimoda and Justin P. Rodriguez

Certain industries like restaurants and in-home employment (caregivers, etc.) are more likely than others to provide benefits such as food and room and board to employees in lieu of traditional cash wage payments. However, employers are not able to present whatever they want to employees and still take a credit. In fact, there are strict guidelines any employer must follow before being able to take a credit.

In each wage order, which are the documents that generally govern the wage and hour protections for California employees, there are set rates for how much in lodging credits and meal credits can be taken and under what circumstances they can take the credits. For example, for lodging and meals, generally only the following maximum credits may be taken:

Lodging: Effective July 1, 2014 Effective January 1, 2016
Room occupied alone $42.33 per week $47.03 per week
Room shared $34.94 per week $38.82 per week
Apartment – two thirds (2/3) of the ordinary rental value, and in no event more than $508.38 per month $564.81 per month
Where a couple are both employed by the employer, two thirds (2/3) of the ordinary rental value, and in no event more than: $564.81 per month $835.49 per month
     
Meals:    
Breakfast $3.26 $3.62
Lunch $4.47 $4.97
Dinner $6.01 $6.68


In each wage order, which are the documents that generally govern the wage and hour protections for California employees, there are set rates for how much in lodging credits and meal credits can be taken and under what circumstances they can take the credits. For example, for lodging and meals, generally only the following maximum credits may be taken:

Another way this can affect employees beyond the amount credited/deducted from their wages is the affect these benefits can have on an employee's regular rate of pay. The higher an employee's regular rate of pay, the higher the required overtime payment to that employee must be. For example, if the hourly wage is $9.00 per hour and the value of lodging equates to approximately an additional $3.00 per hour, the overtime rate of pay would be $18.00 ($12.00 x 1.5) instead of $13.50 ($9.00 x 1.5). Whether the value of the lodging will actually be included in the regular rate calculation will depend on several factors, but, it is apparent the potential affect for employees. Many people, employees and employers alike, simply do not even know these potential ramifications and, where this is the case, there is a large potential for liability and unpaid wages being owed to employees.

If your employer has been taking credits against your wages and you want to determine whether it is being done correctly, please contact our office to have your claims evaluated.

 

The Shimoda Law Corp. legal articles should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents of these articles are intended for general information purposes only, and you are urged to consult a lawyer concerning your own situation and any specific legal questions you may have.

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