In a case of first impression, the US Court of Appeals for the Eleventh Circuit held that employers that provide required housing to migrant farm workers under the H-2A visa program are not entitled to wage credits under the Fair Labor Standards Act (FLSA). In its October 27, 2011 decision in Ramos-Barrientos v. Bland, the court used the DOL's "primarily benefits" test to find that employer-provided housing primarily benefits the employer and therefore may not be taken as a wage credit under the FLSA. The employer was entitled, however, to take wage credits for meals provided to the workers even though meal reimbursements are required under the H-2A program visa regulations.

Bland Farms, LLC in Georgia relies on migrant farm workers hired through the H-2A visa program during planting and harvest seasons. Under this program, employers must provide free housing to workers who cannot return to their residence in the same day. In compliance with other federal regulations, Bland reimbursed the workers for certain fees incurred while travelling to the farm from Mexico including meals, travel and the $200 visa fee charged by the US Consulate.

On September 25, 2006, five workers filed a complaint in the Southern District Court of Georgia, alleging, among other things, that Bland violated the FLSA by shifting certain expenses to the workers, which resulted in pay below the minimum wage. Specifically, the workers claimed that Bland failed to pay travel expenses including:

The district court granted summary judgment to Bland, finding that the workers were not entitled to reimbursement for these travel expenses. The district court further held that Bland could receive a credit for the cost of housing and the meal reimbursements it provided when calculating wages owed to the workers. Bland could use this credit to offset any amount that was owed to the workers for wages and travel expenses, even if the effective wage paid was less than minimum wage.

In a separate order, the district court found that Bland need not reimburse the workers for fees charged by the third-party recruiters, because there was no evidence that Bland had authorized the recruiters to charge the fees on its behalf.

The workers appealed to the Eleventh Circuit.

The Eleventh Circuit affirmed in part and reversed in part, holding that, under the FLSA, Bland was entitled to a wage credit for meals, but not for housing. The employer was not entitled to a housing wage credit under the "primarily benefits" test created by the DOL. In its finding, the court relied on the DOL's interpretation of Section 203(m) of the FLSA presented in its amicus curiae brief. The DOL and the workers argued that housing is provided "primarily for the benefit of the employer," because an employer cannot run its business in violation of the law and the housing was required under federal labor regulations. The court found that because the DOL created the "primarily benefits" test, her interpretation controlled, unless it was plainly erroneous. In applying this test, the court reiterated that the cost of hiring was a mandatory business expense that could not be shifted to workers.

Meals, however, could be counted as and credited against worker wages under the FLSA, because they are always considered primarily for the benefit of the employee under the FLSA (29 C.F.R. § 531.32(c) (2011)). In affirming this part of the decision, the court distinguished between the workers' claim for unpaid wages and their argument that the meal reimbursements were required under the H-2A regulations. The court found that failure to reimburse the meals (by taking a wage credit for that cost) would be a private contract violation, and not a violation under the FLSA.

Finally, the court affirmed the district court's order regarding the third-party fees collected by recruiters. The court did not address whether those fees counted as wages, because the workers failed to show that their employer gave the recruiters authority to collect the fees.

Employers with workers under an H-2A visa:

Before counting meals, lodging or other expenses as credits under the FLSA, employers should consider carefully whether the expense is one that primarily benefits the employer.