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Seligman & Associates v MESC 20.03

Section 44(2)

WAGES, Compensation, Free lodging, Convenience of employer

CITE AS: Seligman & Associates v MESC, No. 85110 (Mich App May 6, 1987).

Appeal pending: No

Claimant: NA

Employer: Seligman & Associates

Docket No: NA

COURT OF APPEALS HOLDING: The value of lodging provided to resident caretakers for the convenience of the employer is not considered wages under the Act.

FACTS: The employer operates numerous apartment complexes. The employer provides rent-free apartments to the apartment caretakers and requires them to live on the premises to be available to handle tenant complaints that may arise.

DECISION: The employer is entitled to a refund of contributions paid based on inclusion of the value of the lodging in calculation of wages.

RATIONALE: The reasonable cash value of lodging is to be considered wages only if it is extended as full or partial remuneration for the services rendered. There is no showing that the lodging was intended as partial compensation for the employees.

"This interpretation of the definition of wages is consistent with the United States Supreme Court's interpretation of the definition of wages under the Federal Unemployment Tax Act (FUTA) in Rowan Co, Inc v United States, 452 US 247, 101 S Ct 2288, 68 L Ed 2d 814 (1981). In Rowan the Supreme Court held that for the purposes of FUTA wages do not include the value of meals and lodging provided for the convenience of the employer."



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