An innkeeper at a Maryland bed-and-breakfast recently won the right to continue her Fair Labor Standards Act (FLSA) lawsuit against her employer over claims that she was not paid minimum wage for her work. The core of the dispute stems from how much credit, if any, the employer can take for the value of non-cash payments made to her.
An Issue With The Value Of Non-Cash Payments
In this case, the bed-and-breakfast provided the innkeeper with $800 per month and a room at the inn, use of laundry, and some meals. While the employer can count these non-cash payments towards its minimum wage obligations, the Fourth Circuit sent the case back to the District Court to ensure that both the right value was attached to those non-cash provisions and that the employee was paid for all the hours she spent working.
The Fourth Circuit stated that the value of the room is not the market value of the room. The market value would be too high as it includes profit, which the employer is not entitled to get credit. Rather, the proper value of the room is the reasonable cost or fair value.
Further, the Fourth Circuit wanted to ensure the employee was paid for all hours she worked and not just her scheduled hours. The employee was required to check-in guests outside of her regular working hours and may have been “engaged to wait”—time that is considered compensable working time under the FLSA.
Additional Considerations for Innkeepers
Another issue that did not arise in this case, but can often be an issue when employees are given benefits beyond regular pay, is the effect on overtime pay. These types of non-cash payments may be considered wages for the purpose of calculating overtime and thus increase the total amount of overtime owed to an employee.
An employment lawyer can help you determine the impact of non-cash payments on your wages under the Fair Labor Standards Act.
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