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Salary Minus Benefits = Unrealistic Annual Salary

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  • Salary Minus Benefits = Unrealistic Annual Salary

    I work for a company that may be considered seasonal since we do the majority of our business 4 months out of the year. We are still open the rest of the year but we concentrate on marketing and recruitment.

    Anyway getting to my question. I'm an administrator in this company overseeing two major parts of the year round operation. I'm a salary/exempt employee. My salary is based on an actual base amount plus housing provided by the company. This is all well and good.

    Currently I'm trying to move out of the provided housing into my own home. Is there any law that would require my employer to increase my salary in place of the rent free home I have been provided over the last few years. My salary is considerably low for anyone in my field and position but with the free housing that was adequate but without housing it's completely unreasonable.

    Any thoughts or suggestions would be appreciated.

  • #2
    Probably no laws of the type you are talking about. The main federal labor law for paying people is FLSA. That law requires non-exempt employees to be paid at least minimum wage ($7.25/hr) and employee who are both Exempt and Salaried to be paid at least $455/week (more in some states). The law allows the value of the housing to count toward these requirements at least some of the time (meaning rules).

    There is no federal labor law rule requiring the employer to pay more base wages then this for any reason.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      I couldn't answer to the 'law', but you would have an arguement to the wage difference. A portion of the housing, if not all on an estimated, or fair market rental value is likely taxable at state or federal levels, or possibly both.
      Giving up the housing and/or housing allowance, should be compensated in like kind wages based on what you are paying taxes on. Housing is part of your "income"...(?)

      (Just thinking in the background here...)

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      • #4
        While every company is different, I can share with you what my company does.

        If an employee moves on site, in their offer letter it states that if they choose to move off site at any time during their employment their wage will not increase due to the lost benefit.

        The company viewpoint is that the only cost to us is the lost income on the apartment. This loss does not even come into play unless we are at 100% occupancy.

        I think CAIW offers a good viewpoint but it would not sway my company.

        OP, has this issue come up with any other employee or is it covered in the employee handbook?

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        • #5
          This issue has come up with other employees in the past. I'm not sure how that was handled at the time. One thing that is different is that housing isn't a benefit at my company it's part of your salary. If this was a simple benefit on top of my annual salary it would be a non- issue. The housing provided by my company is very adequate therefore I have accepted a below average salary over the years. I don't pay any rent or utilities all of this is provided by my employer. Having to pay a mortgage and utilities without an increase in salary seems a bit unrealistic.

          The issue is not covered in any employee handbook or personnel policy. Housing is merely offered in place of an average salary.
          Last edited by CrisHigg; 05-24-2010, 08:23 PM.

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          • #6
            Whether you want to call it a benefit or part of your salary, the bottom line is the company does not have to increase your salary if you chose to move (or even if they made you move).

            As long as you receive minimum wage it is legal. This assumes you don't have a contract which covers this scenario.

            So you should go over in your mind (and maybe even write down) a speech that you think has the best shot of getting you the desired outcome. Then speak with your manager.

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            • #7
              To see what you have as a negotiating position, take a look at what the property is worth to the company if you are not living in it. For example, is there another employee who could live there replacing you on a similar free rent arrangement, could they rent it out to someone else, or would it likely sit vacant part of the year. Each of these would have a different financial impact to the company.

              And, should the company be willing to give you an increase in lieu of quarters, they would be considering what it costs them to provide the quarters, not what it would cost you to obtain something comparable. In financial terms to the company, anything above what it costs them to provide your quarters would, in fact, be a raise. So, consider whether a raise of that magnitude is justified based on your performance and the company's financial position.

              As others have said, as long as minimum wage requirements are being met, this is not a legal issue. My comments are more along the line of structuring a negotiations table that may assist you in understanding and presenting your case.
              Please post questions on the forum rather than sending me a private message or email. That way others who have similar issues have access to the discussion.

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              • #8
                I certainly understand what you are all saying and I thank you for your comments. I have considered what it would cost my company if I left or what they could do with the house. It seems that theres no legal point for me to stand on.

                Like you said whether it's salary or benefit may be irrelevant but id like to think that no company or employer is willing to loose an employee over 5 to 6 thousand dollars annually. I understand your arguments in terms of the law. In terms of reality and a little common sense it doesn't seem fair that a company cuts your pay because they are providing you housing but doesn't raise it to it's original level once you no longer want or need the housing.

                I've been with this company for over 5 years while many were laid off or left, specially during this difficult economy. I have been promoted twice in my 5 years and currently the second in command running the day to day of this company. I'm sure every company believes everyone is replaceable, but my concern is it would cost more to replace me ( if I chose to find a better paying position) than it would to just give me the slight raise I believe I deserve.

                My point is mute I suppose.

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                • #9
                  Originally posted by CrisHigg View Post
                  Like you said whether it's salary or benefit may be irrelevant but id like to think that no company or employer is willing to loose an employee over 5 to 6 thousand dollars annually.
                  A final thought for you on this point. There would be a LOT of people finding themselves unemployed very quickly for giving an employer a take-it-or-leave-it demand for a 5 or 6 thousand annual increase. Assuming you are only making a measly $50,000 a year, that's a 10-12% increase.
                  Last edited by Scott67; 05-25-2010, 05:00 PM.
                  Please post questions on the forum rather than sending me a private message or email. That way others who have similar issues have access to the discussion.

                  Comment

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