Are we allowed to offer housing stipends to just some employees? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Are we allowed to offer housing stipends to just some employees?

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Q. Is it legal to offer some employees, but not others, stipends to help with rent or lodging?

A. Yes, but you should treat similarly situated employees the same. In other words, you could offer employees in particular positions a stipend and not other employees, but you should then make the offer to all employees in those same positions.

Under Section 3(m) of the Fair Labor Standards Act, “wages” paid to an employee includes the reasonable cost of board, lodging, or other facilities if this is “customarily furnished” by the employer to employees.

“Customarily furnished” means “if the facilities are furnished regularly by the employer to his employees or if the same or similar facilities are customarily furnished by other employers engaged in the same or similar trade, business, or occupation in the same or similar communities.” In these circumstances, the reasonable cost or the fair value of the goods or of furnishing the facilities must be added to the employee’s cash wages before determining the regular rate of pay and overtime pay.

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