You’ve decided to hire Juan for the position of herdsman. In addition to the fair wage you’re paying him, you are providing him with a house to live in. Juan and his family move in and he begins employment. Besides move-in day, you may never give Juan’s house or any of your other employee houses another thought.
You may see your housing as a benefit to your employees. But unfortunately, employee housing, if not handled properly, can be a real liability for dairy operations.
One way to protect your operation from liability is to have a written housing agreement. “There is no law that says you must have a written housing agreement for employee housing,” says Anthony Raimondo, agriculture labor law attorney with McCormick Barstow in Fresno, Calif. “But, one of the biggest issues I see with employee housing is the lack of written agreements.”
Here’s a look at why a written housing agreement is a good idea and how it can protect you and your dairy operation.
License vs. tenancy
A basic decision that needs to be made when it comes to employee housing is whether you want your employees to occupy your housing under a license or tenancy.
A license says the employee is here under the owner’s permission, and housing is connected directly to his or her employment. “It’s easier to evict an employee if an employee occupies the housing under a license,” notes Raimondo. Yet, there is a greater risk for the housing to be treated as an employee’s wage, which will drive up overtime pay.
With tenancy, it is easier to separate housing from an employee’s wages. The downside to tenancy is that it is not as easy to evict the occupant after employment has been terminated. The law sets the legal minimum amount of notice that must be given prior to eviction. The minimum is usually 30 or 60 days, depending upon the type of lease.
Whether you decide to handle your employees through a license or tenancy is your choice, but it needs to be established through a written agreement, notes Raimondo.
Establish who occupies the property
A written housing agreement states who can and cannot live in the house.
It is recommended that only the employee, spouse and minor children be allowed to live in the property. Any additional person or persons who wish to occupy the house should be approved by the dairy in writing. As the owner of the property, you have the right to say “no,” says Raimondo.