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18/06/2020

Temporary farm worker accommodation explained

Providing your farm worker's accommodation onsite has many benefits for productivity, worker happiness, as well as increased efficiency. Not only do workers benefit from saving more money with the reduced cost of rent, but being given a warm, dry home improves their wellbeing too. After all, workers that are getting sick from an unhealthy home end up costing you through lost labour and sick days.

But how do you work out the cost-benefit of providing accommodation, and will your workers really appreciate the extra investment? Well, to answer the last question first here is a Google review from someone living in a HouseMe unit thanks to the investment made by their boss.

Worker accommodation review

How temporary worker accommodation is structured:

Firstly, there's an important difference in the types of accommodation offered by an employer. These are broken down into either board or lodging:

  • Board - where an employer provides accommodation and food as part of payment.
  • Lodging - where an employer provides only accommodation as part of payment.

Both are allowed but the employer must pay its employees at least the relevant minimum wage set annually under the Minimum Wage Act 1983. The minimum wage must be paid for each hour worked on the farm and cannot be averaged over a season. Employees must be paid their wages in money, and cannot be paid through other non-cash benefits except for deductions from their wages agreed by the employees for accommodation or other goods or services. Employers and employees may agree that the employer will provide accommodation to an employee, and also that the cost of that accommodation will be deducted from the employee’s wages before they are paid.

It's important to remember that fair market value for the accommodation needs to be used to work out how much is deducted from the employee's wages for the accommodation. If you're providing a unit as accommodation then care should be taken in working out what a fair market rate would be to rent the same unit.

For many farm owners, offering farm worker accommodation has a financial benefit. If being rented the deductions from the wages could cover the rental cost of the unit. If buying the unit then it will eventually become a capital asset funded through the employee salary deductions. When tossing up between buying or renting a transportable unit for farm worker accommodation there are several things to consider:

  1. Seasonality - do you need all-year-round accommodation or only during the busy periods?
  2. Cashflow - would you rather a larger investment paid off over time or smaller monthly payments?
  3. Long-term - might you need the space dedicated to housing for other things in the future?

With the above there are many circumstances when renting provides a better solution. For example, if your seasons are only 6-8 months then having the occupant pay rent on a removable unit means it's only there when it's needed then removed again when it's not. The cashflow for a rental could be covered by the occupant via rental costs being deducted from their wages. This enables the farm owner to tap into the many benefits of providing worker accommodation, without the financial outlay.

Unlike with a fixed dwelling if your circumstances change, or the farm is repurposed, the accommodation isn't something that has to be worked around. It can be removed or relocated very easily!

You can see our available rental units here or discover our range of transportable units to buy here. Have more questions about how a transportable home would work on your farm? Contact us and a member of our team will be in touch to discuss your needs.

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