Does an Employer in New York Receive Credit Toward the Minimum Wage for the Value of an Apartment Furnished to an Employee in a Residential Building?

Does an Employer in New York Receive Credit Toward the Minimum Wage for the Value of an Apartment Furnished to an Employee in a Residential Building?

In New York City, it is common for the owner of a residential building to furnish the building's superintendent and the superintendent's family with an apartment to live in, rent free.  This practice raises the question: In New York State, does an employer receive credit toward the minimum wage for the rental value of an apartment provided, rent free, to a worker in a residential building?  The short answer is "yes," to an extent.

In New York, the extent to which a rent-free apartment furnished by an employer to an employee in a residential building, and occupied by the employee, is creditable against the minimum wage depends upon, among other factors, (i) the rental rates historically charged by the building for similar apartments, (ii) whether the employee's apartment is above ground or, instead, in the building's basement, and (iii) the number of dwelling units in the building.

The New York State Department of Labor's Minimum Wage Order for the Building Service Industry, 12 N.Y.C.R.R. Part 141, requires, for residential buildings with any number of units, that janitors be paid a minimum wage of at least $4.85 per unit per week.  12 N.Y.C.R.R. §§ 141-1.1, 141-1.2.  This unit rate does not apply to janitors who are paid at least $308.35 per week.

The same Minimum Wage Order requires that all employees in the building service industry except janitors in residential buildings be paid at least the New York minimum wage of $7.25 per hour for all hours worked.  12 N.Y.C.R.R. §§ 141-1.1, 141-1.3; see 12 N.Y.C.R.R. § 141-3.1 (defining the term "building service industry"); 12 N.Y.C.R.R. § 141-3.4 (defining the term "janitor").

For residential buildings in New York with nine or more dwelling units, the rental value of an apartment furnished, rent free, by an employer to a worker in the building, and occupied by the worker, may be considered part of the minimum wage, but the allowance for that apartment may not exceed:

  • with respect to an apartment on the ground or top floors of the building, the lowest rental on June 1, 1975 for apartments having the same number of rooms in the building;
  • as to an apartment above the ground and below the top floors of the building, the average rental on June 1, 1975 of apartments with the same number of rooms, in the same line of the building, including the apartments on the ground and top floors;
  • with regard to an apartment for permanent occupancy below curb level, 85% of the lowest rental on June 1, 1975 for curb-level or above-curb-level apartments having the same number of rooms in the building; and
  • as to an apartment for temporary occupancy below curb level, 50% of the lowest rental on June 1, 1975 for curb-level or above-curb-level apartments having the same number of rooms in the building.

12 N.Y.C.R.R. §§ 141-1.5, 141-1.5(a); see 12 N.Y.C.R.R. § 141-3.8 (defining the term "apartment for permanent occupancy below curb level"); 12 N.Y.C.R.R. § 141-3.8 (defining the term "apartment for temporary occupancy below curb level")

No credit toward the minimum wage is allowed for an apartment furnished by an employer to a worker unless the employer makes available, upon request of the New York State Department of Labor (the "Department of Labor") the rental records required by 12 N.Y.C.R.R. Part 141.  12 N.Y.C.R.R. § 141-2.4; see 12 N.Y.C.R.R. § 141-2.1 (Employer records).

Further, every employer in the building service industry in New York must furnish to each employee a statement with every payment of wages, listing, among other information, any allowances claimed as part of the minimum wage.  See 12 N.Y.C.R.R. § 141-2.2.

If your company needs assistance or guidance on a labor or employment law issue and your company is located in the New York City area, call Attorney David S. Rich at (212) 209-3972.

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