Does An Employer In Manhattan Receive Credit Toward The Minimum Wage For The Value Of An Apartment Furnished To An Employee In A Residential Building?

In Manhattan, it is common for the owner of a residential building to furnish the building’s superintendent and the superintendent’s family with an apartment to live in, rent free. This practice raises the question: In New York State, does an employer receive credit toward the minimum wage for the rental value of an apartment provided, rent free, to a worker in a residential building? The short answer is “yes,” to an extent.

In New York City (including the borough of Manhattan) and throughout the remainder of New York State, the extent to which a rent-free apartment furnished by an employer to an employee in a residential building, and occupied by the employee, is creditable against the minimum wage depends upon at least three factors.  These three factors are (i) the rental rates historically charged by the building for similar apartments, (ii) whether the employee’s apartment is above ground or, instead, in the building’s basement, and (iii) the number of dwelling units in the building.

The New York State Department of Labor’s Minimum Wage Order for the Building Service Industry, 12 N.Y.C.R.R. Part 141, requires:

• For residential buildings in New York City (including Manhattan) and in Nassau, Suffolk  and Westchester Counties with any number of units, that employers pay janitors:
  • On and after January 1, 2024, a minimum wage of at least $10.65 per unit per week;
  • On and after January 1, 2025, a minimum wage of at least $11.00 per unit per week; and
  • On and after January 1, 2026, a minimum wage of at least $11.35 per unit per week.

These unit rates do not apply to janitors in New York City (including the borough of Manhattan) who are paid:

• On and after January 1, 2024, at least $680.55 per week;
• On and after January 1, 2025, at least $701.80 per week; and
• On and after January 1, 2026, at least $723.05.

• For residential buildings outside of New York City and outside of Nassau, Suffolk  and Westchester Counties with any number of units, that employers pay janitors:
  • On and after January 1, 2024, a minimum wage of at least $10.00 per unit per week;
  • On and after January 1, 2025, a minimum wage of at least $10.35 per unit per week;
  • On and after January 1, 2026, a minimum wage of at least $10.70 per unit per week;

These unit rates do not apply to janitors in Nassau, Suffolk  and Westchester Counties who are paid:

• On and after January 1, 2024, at least $680.55 per week;
• On and after January 1, 2025, at least $701.80 per week; and
• On and after January 1, 2026, at least $723.05.

Likewise, these unit rates do not apply to janitors outside of New York City and outside of Nassau, Suffolk  and Westchester Counties who are paid:

• On and after January 1, 2024, at least $637.50 per week;
• On and after January 1, 2025, at least $658.75 per week; and
• On and after January 1, 2026, at least $680.00 per week.

The same Minimum Wage Order requires that all employees in the building service industry except janitors in residential buildings be paid at least the New York State minimum wage, which, depending on the county in which the employer is located:

• On and after January 1, 2024, varies from $15.00 per hour to $16.00 per hour;
• On and after January 1, 2025, varies from $15.50 per hour to $16.50 per hour; and
• On and after January 1, 2026, varies from $16.00 per hour to $17.00 per hour.

For residential buildings in New York City (including the borough of Manhattan) and throughout the rest of New York State with nine or more dwelling units, the rental value of an apartment furnished, rent free, by an employer to a worker in the building, and occupied by the worker, may be considered part of the minimum wage, but the allowance for that apartment may not exceed:

• with respect to an apartment on the ground or top floors of the building, the lowest rental on June 1, 1975 for apartments having the same number of rooms in the building;
• as to an apartment above the ground and below the top floors of the building, the average rental on June 1, 1975 of apartments with the same number of rooms, in the same line of the building, including the apartments on the ground and top floors;
• with regard to an apartment for permanent occupancy below curb level, 85% of the lowest rental on June 1, 1975 for curb-level or above-curb-level apartments having the same number of rooms in the building; and
• as to an apartment for temporary occupancy below curb level, 50% of the lowest rental on June 1, 1975 for curb-level or above-curb-level apartments having the same number of rooms in the building.

12 N.Y.C.R.R. §§ 141-1.5, 141-1.5(a); see 12 N.Y.C.R.R. § 141-3.8 (defining the term “apartment for permanent occupancy below curb level”); 12 N.Y.C.R.R. § 141-3.8 (defining the term “apartment for temporary occupancy below curb level”)

New York allows no credit toward the minimum wage for an apartment furnished by an employer to a worker unless the employer makes available, upon request of the New York State Department of Labor (the “Department of Labor”) the rental records required by 12 N.Y.C.R.R. Part 141. 12 N.Y.C.R.R. § 141-2.4; see 12 N.Y.C.R.R. § 141-2.1 (Employer records).

Further, every employer in the building service industry in New York City (including Manhattan) and in the rest of New York State must furnish to each employee a statement with every payment of wages. These wage statements must list, among other information, any allowances claimed as part of the minimum wage. See 12 N.Y.C.R.R. § 141-2.2.

If your company needs assistance or guidance on a labor or employment law issue and your company is located in the New York City metro area, call Manhattan Employment Lawyer David S. Rich at (347) 835-5688.