California Apartment Association

In line with a request from CAA to the California Department of Industrial Relations, when minimum wage goes up, so will the lodging credit that a property owner may use to offset an employee’s minimum wage payment or as a credit against wages when the employee lives on site.

For an employee required to live on a rental property, an employer can pay wages for the time worked and charge that employee up to two-thirds of the fair market value of the unit he or she lives in.

Alternatively, the owner can use the rental unit value as a credit against the employee’s wages or as a credit against  the minimum wage, however, that credit is capped by the Department of Industrial Relations at $451.89 per month for an individual employee and $668.48 for a couple who occupy the unit.

After writing to the Division of Labor Standards Enforcement, CAA has received confirmation that the lodging credit will increase along with the minimum wage.

On July 1, when minimum wage bumps by $1 to $9 per hour, the maximum lodging credit will grow to $508.38 for a single employee and to $752.02 for a couple who occupy a rental unit on site as a condition of their employment. Likewise, when minimum wage rises to $10 per hour on Jan. 1, 2016, the maximum lodging credit will bump to $564.81 for a single employee and $835.49 for a couple.

For more information about this law, see CAA’s Background Paper on the topic.