Idaho Law Blog
Yes, an employer in Idaho can pay employee with non-monetary compensation, and most do to some extent. Non-monetary compensation is any work benefit that isn’t paid in cash, with a check, or by deposit into the employee’s bank account. See Paolini v. Albertson’s, Inc., 143 Idaho 547, 550, 149 P.3d 822, 825 (2006). Sometimes these benefits are called “incidental benefits.” Examples include paid time off, retirement matching, entertainment, daycare services, gym membership discounts, tuition assistance, free magazine subscriptions, stock options, room and board, and health care benefits. These benefits allow employers to provide their employees more value without directly putting more money in their pockets, and sometimes the employer is able to directly deduct the value of these benefits from the amount the employer would otherwise pay the employee.
There are limits, however, on an employer’s use of non-monetary compensation. Under Idaho law, at least some compensation must be paid in cash. See Idaho Code § 45-608 (“Employers shall pay all wages due to their employees . . . in lawful money of the United States or with checks . . . .” (emphasis added)). For example, an employer cannot pay an employee purely in tuition assistance, even if the value of this benefit is equal to or greater than minimum wage.
The Fair Labor and Standards Act (FLSA) provides other limitations. Let’s suppose a hotel hires a live-in manager. Under the FLSA, the hotel can deduct from the manager’s pay check “the reasonable cost . . . of board, lodging, or other facilities.” 29 CFR 531.27(b). However, the manager’s acceptance of room and board must also be “voluntary and uncoerced.” 29 CFR 531.30. Moreover, under the FLSA an employer cannot delay paying an employee by providing non-monetary compensation in the form of such items as tokens or “scrip,” which is Monopoly money that the employee will let you cash in at a later time. 29 CFR 531.34.
These are just a few examples of many laws and regulations on non-monetary compensation. If you are an Idaho employer considering paying an employee through non-monetary compensation, or if you are an Idaho employee who has questions about non-monetary compensation, please contact one of our employment and labor lawyers at Racine Olson. We can help.