In this edition: When the value of meals or lodging provided to an employee must be added to the payroll developed during the policy term for unit statistical data reporting purposes.
In some industries, it is common for an employer to provide meals or lodging to employees. The USRP at Part 3 – Standard Classification System, Section V – Payroll – Remuneration, Rule 1b provides the following instructions regarding meals and lodging:
b. Meals and Lodging
The value of meals or lodging provided to an employee shall not be included in the payroll unless:
(1) the special industry classification procedures or the classification phraseology specifically prescribe otherwise,
(2) the employee’s wages are reduced by an amount equal to the value of such meals or lodging, or
(3) the meals or lodging are provided expressly in lieu of wages.
With regard to meals, there are no special industry classification procedures or classifications that specify that the value of meals be included as payroll. Therefore, the value of meals are only included when an employee’s wages are reduced by the value of the meal or the meal is provided expressly in lieu of wages, which is uncommon. However, it is common to see a payroll adjustment for employees who receive meals where the value of the meal is added to their taxable wages, taxed, and then deducted from wages. This adjustment is solely for tax purposes, and does not indicate that the employee’s wages were reduced or that the meal was provided in lieu of wages. In other words, the employee would not receive increased wages if they refused the meal. In such cases, the value of meals is not included as reportable remuneration.
With regard to lodging, the special industry classification procedures for Farms and Mining direct that the market value of lodging provided to the employee shall be included as payroll. In addition, the following classifications direct that the value of lodging shall be included:
8840, CHURCHES, TEMPLES, MOSQUES AND SYNAGOGUES — clergy, professional assistants, organists, or members of choir
9015(4), CHURCHES, TEMPLES, MOSQUES AND SYNAGOGUES — all employees other than clergy, professional assistants, organists, members of choir or Clerical Office Employees
9033, HOUSING AUTHORITIES 9011, APARTMENT OR CONDOMINIUM COMPLEX OPERATION — N.O.C. — not Homeowners Associations
9007, APARTMENT OR CONDOMINIUM COMPLEX OPERATION FOR SENIORS — age restricted — not Congregate Living Facilities or Homeowners Associations
9015(1), BUILDING OPERATION – N.O.C. – all other employees 9010, MOBILE HOME PARK OPERATION — all other employees
8290, WAREHOUSES — self-storage — all other employees
The market value of lodging is the amount of money the employer could reasonably expect to receive if the lodging were made available to the general public or the amount of money the residing employee would expect to pay for comparable housing in the same area. In some cases, the employer’s records may reflect a reduced value for lodging (e.g., 66% of market value) that has been calculated for tax reporting or other purposes; however, for workers’ compensation payroll reporting purposes, the full market value must be used with no reductions. In cases where the employee receives a partial rent credit from his/her employer, the full market value of comparable housing minus the amount the employee pays for rent out-of-pocket shall be included as reportable remuneration.