Decide who pays for utilities
State in the written agreement who is responsible to pay for utilities.
Set utilities up in the employee’s name and not the dairy’s. If they are in the dairy’s name, you will be on “the hook” for the full dollar amount. The amount you pay for utilities can also be capped, says Raimondo. “This is why a written housing agreement is so important — all of these details about who pays for what and how much can be stated,” he explains. Whenever possible, the best approach is for employees to maintain utility accounts in their own names.
Other things to keep in mind when it comes to employee housing is to decide whether or not to require renter’s insurance and to make sure that the dairy’s liability insurance will cover the worst-case scenario.
Housing is a simple issue that dairy owners are not paying attention to. Yet, it is one area that could leave the dairy open to a whole host of liabilities if the proper protections are not in place. There is no right or wrong way to deal with employee housing; the mistake is not dealing with it at all.
Your local attorney should be able to help you develop a written agreement that is tailored to your individual dairy and needs.
The rent debate
Some dairy owners may choose to charge their employees rent.
The upside to charging an employee rent is that if a person goes out on workers’ comp, it simplifies the person staying in the house. If the employee stops paying rent, he or she is evicted.
If, on the other hand, rent is not charged, workers comp becomes a gray area. If an employee goes out on extended workers’ comp, when is he or she is no longer employed? It could become a discrimination complaint, says Anthony Raimondo, agriculture labor law attorney with McCormick Barstow in Fresno, Calif. The employee might claim that he or she was evicted due to the workplace injury, and was discriminated against for filing a worker’s comp claim.
Be careful of arrangements where the dairy is paying rent for an employee. A cash payment like that will likely be construed as a wage, which can drive up payroll taxes and overtime wages.
Inspect employee housing
Establish the right to do periodic inspections with a written housing agreement.
Inspections should be performed at a minimum once per year. After inspecting the property, perform any necessary repairs. Don’t close your eyes to the repairs.
It is a good idea to have your housing inspected by a third-party housing inspector. “Usually, you can negotiate a flat rate with an inspector for all housing to be inspected at least once per year,” says Anthony Raimondo, agriculture labor law attorney with McCormick Barstow in Fresno, Calif. A housing inspection will ensure that your housing meets both state and federal standards. Housing standards vary by state.