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Bland Amicus Brief, in support of plaintiffs-appellants

No. 10-13412-C
___________________________________

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

___________________________________

NICOLAS RAMOS-BARRIENTOS, ET AL.,

Plaintiffs-Appellants,

v.

DELBERT C. BLAND and BLAND FARMS, LLC,

Defendants-Appellees.

___________________________________

On Appeal from the United States District Court
for the Southern District of Georgia
___________________________________

BRIEF FOR THE SECRETARY OF LABOR AS
AMICUS CURIAE IN SUPPORT OF PLAINTIFFS-APPELLANTS

___________________________________

M. PATRICIA SMITH
Solicitor of Labor

WILLIAM C. LESSER
Acting Associate Solicitor

PAUL L. FRIEDEN
Counsel for Appellate Litigation

DIANE A. HEIM
Attorney
U.S. Department of Labor
Office of the Solicitor
Room N-2716
200 Constitution Ave., N.W.
Washington, D.C. 20210
(202) 693-5555

CERTIFICATE OF INTERESTED PERSONS
AND CORPORATE DISCLOSURE STATEMENT

    The Secretary of Labor believes that the Certificate of interested Persons filed by Appellants in their principal Brief is complete, other than the addition of the Secretary of Labor, as follows:

    Solis, Hilda L. (Secretary, U.S. Department of Labor, Amicus Curiae)

TABLE OF CONTENTS

CERTIFICATE OF INTERESTED PERSONS AND CORPORATE DISCLOSURE STATEMENT

TABLE OF AUTHORITIES

STATEMENT OF THE ISSUE

STATEMENT OF IDENTITY OF THE AMICUS CURIAE, INTEREST, AND AUTHORITY TO FILE

THE DISTRICT COURT'S DECISION

SUMMARY OF THE ARGUMENT

ARGUMENT

HOUSING THAT AN H-2A EMPLOYER IS OBLIGATED TO FURNISH FREE OF CHARGE TO ITS EMPLOYEES IS AN EMPLOYER BUSINESS EXPENSE AND THUS PRIMARILY FOR THE BENEFIT OF THE EMPLOYER

  1. Statutory and Regulatory Background

  2. Housing that an H-2A Employer is Required by Law to Provide Free of Charge is an Employer Business Expense

CONCLUSION

CERTIFICATE OF COMPLIANCE

CERTIFICATE OF SERVICE

ADDENDUM

TABLE OF AUTHORITIES

Cases:

Archie v. Grand Cent. P'ship, Inc., 86 F. Supp. 2d 262 (S.D.N.Y. 2000)

*Arriaga v. Florida Pac. Farms, L.L.C., 305 F.3d 1228 (11th Cir. 2002)

Bailey v. Pilots' Ass'n for the Bay & River Del., 406 F. Supp. 1302 (E.D. Pa. 1976)

Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728 (1981)

Bonilla v. Baker Concrete Constr., Inc., 487 F.3d 1340 (11th Cir. 2007)

Caro-Galvan v. Curtis Richardson, Inc., 993 F.2d 1500 (11th Cir. 1993)

Castillo v. Case Farms of Ohio, Inc., 96 F. Supp. 2d 578 (W.D. Tex. 1999)

Chellen v. John Pickle Co., Inc., 446 F. Supp. 2d 1247 (N.D. Okla. 2006)

Davis Brothers, Inc. v. Donovan, 700 F.2d 1368 (11th Cir. 1983)

DeLuna-Guerrero v. North Carolina Grower's Ass'n, Inc., 338 F. Supp. 2d 649 (E.D.N.C. 2004)

Federal Express Corp. v. Holowecki, 552 U.S. 389 (2008)

Garcia v. Frog Island Seafood, Inc., 644 F. Supp. 2d 696 (E.D.N.C. 2009)

Jiao v. Shi Ya Chen, No. 03 Civ. 0165(DF), 2007 WL 4944767 (S.D.N.Y. Mar. 30, 2007)

Leach v. Johnston, 812 F. Supp. 1198 (M.D. Fla. 1992)

Marshall v. DeBord d/b/a/ Bernie's Rest Haven, No. 77-106-C, 1978 WL 1705 (E.D. Okla. July 27, 1978)

Marshall v. Glassboro Serv. Ass'n, Inc., 1979 WL 1989 (D.N.J. Oct. 19, 1979)

Marshall v. Truman Arnold Distrib. Co., 640 F.2d 906 (8th Cir. 1981)

Masters v. Maryland Mgmt. Co., 493 F.2d 1329 (4th Cir. 1974)

Mitchell v. Lublin, McGaughy & Assoc., 358 U.S. 207 (1959)

Morante-Navarro v. T& Y Pine Straw, Inc., 350 F.3d 1163 (11th Cir. 2003)

Osias v. Marc, 700 F. Supp. 842 (D. Md. 1988)

Ramos-Barrientos, et al. v. Bland, No. 606CV089, 2010 WL 2521041 (S.D. Ga. June 21, 2010)

Resias Polycarpe, et al. v. E& S Landscaping Serv., Inc., et al., ___ F.3d ___,2010 WL 3398825 (11th Cir. 2010)

Rutherford Food Corp. v. McComb, 331 U.S. 722 (1947)

Skidmore v. Swift & Co., 323 U.S. 134 (1944)

Soler v. G. & U., Inc., 833 F.2d 1104 (2d Cir. 1987)

Soler v. G. & U, Inc. & Sec'y of Labor, 768 F. Supp. 452 (S.D.N.Y. 1991)

Strong v. Williams, No. 78-124-Civ-TG, 1980 WL 8134 (M.D. Fla. Apr. 22, 1980)

Tony & Susan Alamo Found. v. Secretary of Labor, 471 U.S. 290 (1985)

Williams v. Atlantic Coast Line R.R. Co., 1 Wage and Hour Cases (BNA) 289 (E.D.N.C. 1940)

Statutes:

Fair Labor Standards Act of 1938, as amended; 29 U.S.C. 201 et seq.,

29 U.S.C. 202(a)
29 U.S.C. 202(b)
29 U.S.C. 203(m)
29 U.S.C. 204(a)
29 U.S.C. 204(b)
29 U.S.C. 206(a)
29 U.S.C. 216(c)
29 U.S.C. 217
29 U.S.C. 218(a)

Immigration & Nationality Act of 1990,

8 U.S.C. 1101(a)(15)(H)(ii)(a)
8 U.S.C. 1184(c)(1)
8 U.S.C. 1188
8 U.S.C. 1188(a)(1)
8 U.S.C. 1188(c)(4)

Migrant and Seasonal Agricultural Worker Protection Act, 29 U.S.C. 1801 et seq.

Code of Federal Regulations:

20 C.F.R. Part 655, subpart B
20 C.F.R. 655.100
20 C.F.R. 655.103(a)
20 C.F.R. 655.121
20 C.F.R. 655.122
20 C.F.R. 655.122(d)(1)
20 C.F.R. 655.122(i)
20 C.F.R. 655.122(1)
20 C.F.R. 655.122(n)
20 C.F.R. 655.135
20 C.F.R. 655.135(f)
20 C.F.R. 655.135(i)
20 C.F.R. 655.151
20 C.F.R. 655.152
20 C.F.R. 655.153
20 C.F.R. 655.170(b)
29 C.F.R. Part 501
29 C.F.R. 531.3
29 C.F.R. 531.3(d)(1)
29 C.F.R. 531.3(d)(2)
29 C.F.R. 531.31
29 C.F.R. 531.32
29 C.F.R. 531.32(a)
29 C.F.R. 531.32(c)
29 C.F.R. 531.33
29 C.F.R. 531.34
29 C.F.R. 531.35
29 C.F.R. 531.36
29 C.F.R. 531.36(b)
29 C.F.R. 531.38

Miscellaneous:

75 Fed. Reg. 6884 (Feb. 12, 2010)

Fed. R. App. P. 29(a)

Department of Labor, Wage-Hour Field Operations Handbook, 30c02(b) (1988), available at www.dol.gov/whd/FOH

Department of Labor, Wage-Hour Field Operations Handbook, 30c03(a)(2) (1988), available at www.dol.gov/whd/FOH

Department of Labor, Wage-Hour Field Operations Handbook, 30c13(a)(4) (1988), available at www.dol.gov/whd/FOH

Department of Labor, Wage-Hour Field Operations Handbook, 30c13(a)(4)(a) (1988),available at www.dol.gov/whd/FOH

Department of Labor, Wage-Hour Field Operations Handbook, 30c13(a)(4)(b) (1988), available at www.dol.gov/whd/FOH

Department of Labor, Wage-Hour Field Operations Handbook, 30c13(a)(4)(c) (1988), available at www.dol.gov/whd/FOH

United States Dep't of Labor, Opinion Letter, dated Oct. 12, 1943

United States Dep't of Labor, Opinion Letter, dated Sept. 18, 1959

United States Dep't of Labor, Opinion Letter, dated June 16, 1975

United States Dep't of Labor, Opinion Letter, 1997 WL 998029, dated August 19, 1997

No. 10-13412-C
___________________________________

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

___________________________________

NICOLAS RAMOS-BARRIENTOS, ET AL.,

Plaintiffs-Appellants,

v.

DELBERT C. BLAND and BLAND FARMS, LLC,

Defendants-Appellees.

___________________________________

On Appeal from the United States District Court
for the Southern District of Georgia
___________________________________

BRIEF FOR THE SECRETARY OF LABOR AS
AMICUS CURIAE IN SUPPORT OF PLAINTIFFS-APPELLANTS

___________________________________

    Pursuant to Federal Rule of Appellate Procedure 29(a), the Secretary of Labor ("Secretary") submits this brief as amicus curiae in support of Plaintiffs-Appellants with respect to whether the Fair Labor Standards Act ("FLSA" or "Act"), 29 U.S.C. 201 et seq., permits H-2A employers to take credit toward the FLSA minimum wage for the cost of housing that they provide to their H-2A employees when the H-2A program requires employers to provide such housing free of charge. [1]

STATEMENT OF THE ISSUE

    Whether the district court erred when it held that, pursuant to section 3(m) of the FLSA, 29 U.S.C. 203(m), an employer may take credit toward the FLSA minimum wage for the cost of housing that the employer is obligated to furnish free of charge to agricultural employees working temporarily in the United States on H-2A visas.

STATEMENT OF IDENTITY OF THE AMICUS CURIAE,
INTEREST, AND AUTHORITY TO FILE

    The Secretary is responsible for the administration and enforcement of the FLSA. See 29 U.S.C. 204(a) and (b), 216(c), and 217. The Secretary also is responsible for the procedures employers must follow to obtain labor certifications authorizing the admission of H-2A workers, and for the enforcement of the H-2A program's worker protection provisions. See 8 U.S.C. 1184(c)(1) and 1188; 20 C.F.R. Part 655, subpart B; 29 C.F.R. Part 501. The Secretary has compelling reasons to participate as amicus curiae in this case, because she has a substantial interest in the correct interpretation of the FLSA to ensure that all employees receive the wages to which they are entitled. In particular, the Secretary is interested in the correct interpretation of section 3(m) of the Act and the regulations interpreting it, including the requirements that employers may not shift their business expenses to employees and that employees must receive at least the minimum wage free and clear. See 29 C.F.R. 531.3, 531.32-.36. The Secretary also has an interest in ensuring that H-2A employers abide by the requirements of the H-2A visa program relating to employees' terms and conditions of employment, because employers must certify to the Department that they will comply with these requirements in order to obtain a labor certification authorizing their participation in the temporary nonimmigrant worker program. See 20 C.F.R. 655.135.

    The Secretary submits this amicus brief pursuant to Federal Rule of Appellate Procedure 29(a).

THE DISTRICT COURT'S DECISION

    1.    The H-2A employees in this case argued in the district court that Bland had not properly reimbursed them in the first workweek for certain inbound transportation, border crossing, and other expenses that it had required them to bear, expenses that the employees asserted were primarily for the benefit of the employer. [2] See Ramos-Barrientos, et al. v. Bland, 2010 WL 2521041, at *2 (S.D. Ga. 2010). In response, Bland asserted that if it received credit under section 3(m) of the FLSA for the housing it furnished, there was no shortfall in wages. Id. Noting the "dearth of case law" on point, the district court rejected the argument that an H-2A employer may not take credit toward the FLSA minimum wage for housing that it must provide free of charge pursuant to the H-2A program and granted summary judgment to Bland. Id. at *3.

    2.    In so ruling, the court found the three cases the employees relied upon to be unhelpful. In two of those cases, the courts concluded that the employers were not entitled under section 3(m) to take any credit for lodging that they furnished because the housing had been provided in violation of state law. Thus, the court in Garcia v. Frog Island Seafood, Inc., 644 F. Supp. 2d 696 (E.D.N.C. 2009), denied any credit for housing provided to H-2B workers because the employer had violated state law by failing to register with the state and to have the housing inspected prior to the employees' occupancy. The court in Osias v. Marc, 700 F. Supp. 842 (D. Md. 1988), similarly denied any wage credit for housing provided to domestic migrant farmworkers covered by the Migrant and Seasonal Agricultural Worker Protection Act ("MSPA"), 29 U.S.C. 1801, et seq., because the housing was found to be seriously substandard. The district court here distinguished these two cases, because there was no argument that the housing Bland furnished was substandard or otherwise provided in violation of the law. See Ramos-Barrientos, 2010 WL 2521041, at *4.

    The third case the employees relied upon was Marshall v. Glassboro Serv. Ass'n, Inc., 1979 WL 1989 (D.N.J. 1979), in which the court denied the employer the right to take any credit for housing provided to migrant farmworkers from Puerto Rico because a contract in the nature of a collective bargaining agreement, negotiated between the growers' association and the Commonwealth of Puerto Rico on behalf of the workers, required the employer to provide lodging at no cost. Citing the statutory construction canon of expressio unius est exclusion alterius, the district court stated that Congress, in section 3(m), would not have limited the exclusion from wages to housing and facilities provided pursuant to a collective bargaining agreement if it intended an additional exclusion for situations where the employer agrees in an individual employment contract to provide housing at no cost. See Ramos-Barrientos, 2010 WL 2521041, at *4.

    3.    The district court also rejected the employees' argument that allowing a wage credit under the FLSA would effectively cause Bland to be in violation of the H-2A requirement to provide housing free of charge, stating that this argument "convolutes the distinct requirements that employers must adhere to under the FLSA and under the Department of Labor's H-2A program. . . . Defendants complied with H-2A regulations when they provided free housing to Plaintiffs and other H-2A employees. Defendants do not violate those regulations by taking a 203(m) wage credit for the reasonable cost of housing provided to their employees, something that the FLSA permits them to do." Ramos-Barrientos, 2010 WL 2521041, at *4. Therefore, the district court held that Bland was entitled under section 3(m) to take credit toward the FLSA minimum wage for the housing it provided its H-2A workers. Id. at *5.

SUMMARY OF THE ARGUMENT

    FLSA-covered employers are required to pay their non-exempt employees at least the minimum wage "free and clear" for all hours worked. See 29 U.S.C. 206(a); 29 C.F.R. 531.35. In order to comply with the free and clear requirement, an employer may not take credit toward the minimum wage for the costs of furnishing facilities that are primarily for the benefit or convenience of the employer. See 29 C.F.R. 531.3(d)(1). Employer business expenses, such as tools of the trade and uniforms required by the nature of the job, are primarily for the benefit of the employer. See 29 C.F.R. 531.3(d)(2). Similarly, expenses that an employer is required by law to pay, such as worker's compensation taxes or the employer's share of Social Security taxes, are business expenses that are primarily for the benefit of the employer. See 29 C.F.R. 531.32(c) and 531.38.

    Because an H-2A employer that brings foreign workers into the country to perform temporary agricultural labor or services is required to furnish housing free of charge pursuant to the terms of the H-2A visa program, see 8 U.S.C. 1188(c)(4) and 20 C.F.R. 655.122(d)(1), [3] such an expense is an H-2A employer business expense. This makes the employer the primary beneficiary of that housing expense for purposes of section 3(m). Thus, the H-2A requirement to furnish housing at no cost rebuts the presumption created by section 3(m) that an employer ordinarily may count toward the minimum wage the reasonable cost of lodging for employees.

    Therefore, this Court should reverse the district court's decision because the district court erred by failing to conduct a primary beneficiary analysis under section 3(m), and by concluding that an H-2A employer may take credit toward the FLSA minimum wages due in the first workweek for the H-2A required housing. Such a reversal would be consistent with this Court's decision in Arriaga v. Florida Pacific Farms, LLC, 305 F.3d 1228, 1236-37 (11th Cir. 2002), in which this Court held that where an expense is primarily for the benefit of the employer, the employer must reimburse the employees during the workweek in which the expense arose up to the point that their wages satisfy the FLSA minimum wage.

ARGUMENT

HOUSING THAT AN H-2A EMPLOYER IS OBLIGATED TO FURNISH FREE OF CHARGE TO ITS EMPLOYEES IS AN EMPLOYER BUSINESS EXPENSE AND THUS PRIMARILY FOR THE BENEFIT OF THE EMPLOYER

  1. Statutory and Regulatory Background

    1.    The FLSA is a statute of broad remedial purpose. See Rutherford Food Corp. v. McComb, 331 U.S. 722, 727 (1947). Congress enacted the minimum wage provision of the FLSA to protect workers from substandard wages and to prevent labor conditions detrimental to the maintenance of the minimum standard of living necessary for the health, efficiency, and general well-being of workers. See Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 739 (1981); 29 U.S.C. 202(a), (b). Therefore, the Supreme Court "has consistently construed the Act 'liberally to apply to the furthest reaches consistent with congressional direction'" in order to effectuate the broad remedial and humanitarian purposes of the Act. Tony and Susan Alamo Foundation v. Secretary of Labor, 471 U.S. 290, 296 (1985) (quoting Mitchell v. Lublin, McGaughy & Associates, 358 U.S. 207, 211 (1959)).

    2.    Section 6 of the FLSA requires covered employers to pay their nonexempt employees at least the minimum wage (currently $7.25 per hour) for each hour worked. See 29 U.S.C. 206(a). Generally, employers must pay the wages due in cash and must pay the wages "free and clear." 29 C.F.R. 531.35. However, section 3(m) of the FLSA provides that an employer also may count as wages "the reasonable cost, as determined by the Administrator [of the Wage and Hour Division], to the employer of furnishing such employee with board, lodging, or other facilities, if such board, lodging or other facilities are customarily furnished by such employer to his employees: Provided, That the cost of board, lodging, or other facilities shall not be included as a part of the wage paid to any employee to the extent it is excluded there from under the terms of a bona fide collective-bargaining agreement applicable to the particular employee." 29 U.S.C. 203(m).

    The implementing regulations provide that the "cost of furnishing 'facilities' found by the Administrator to be primarily for the benefit or convenience of the employer will not be recognized as reasonable and may not therefore be included in computing wages." 29 C.F.R. 531.3(d)(1); see 29 C.F.R. 531.32(c) and 29 C.F.R. 531.36(b); see also Arriaga, 305 F.3d at 1241-44 (transportation and visa costs incurred by H-2A employees are primarily for the benefit of the employer and must be reimbursed up to the point that the employees' wages satisfy the FLSA minimum wage); Soler v. G& U, Inc. and Secretary of Labor, 833 F.2d 1104, 1109 (2d Cir. 1987) (applying the balancing of benefits test to lodging and holding that the test provides a common-sense and logical approach to resolve whether costs may be counted toward the payment of an employee's wage). In applying this primary benefit test, the regulations specifically state that employer business expenses such as tools of the trade, other materials and services incidental to carrying on the employer's business, and uniforms required by the nature of the business are primarily for the convenience of the employer. See 29 C.F.R. 531.3(d)(2). The regulations similarly recognize that other employer business expenses, such as electric power used for commercial production, company police and guard protection, and taxes and insurance on the employer's buildings, are primarily for the benefit of the employer. See 29 C.F.R. 531.32(c).

    Moreover, because an employer is not permitted to operate its business in violation of the law, expenses imposed on the employer by law also must be viewed as inherently for the primary benefit of the employer. Thus, the section 3(m) regulations recognize that "medical services and hospitalization which the employer is bound to furnish under workmen's compensation acts or similar Federal, State or local law" do not qualify as facilities because they are primarily for the benefit of the employer. 29 C.F.R. 531.32(c). Furthermore, "[n]o deduction may be made for any tax or share of a tax which the law requires to be borne by the employer." 29 C.F.R. 531.38. For example, legally-required employer expenses like the employer's share of Social Security taxes and its taxes for unemployment compensation do not qualify as wages under section 3(m). See Williams v. Atlantic Coast Line Railroad Co., 1 Wage and Hour Cases (BNA) 289, 294 (E.D.N.C. 1940). Finally, the regulations provide that "[f]acilities furnished in violation of any Federal, State, or local law, ordinance or prohibition will not be considered facilities 'customarily' furnished." 29 C.F.R. 531.31; see Caro-Galvan v. Curtis Richardson, Inc., 993 F.2d 1500, 1513 n.29 (11th Cir. 1993).

    3.    The H-2A program requires employers to furnish housing free of charge to their H-2A employees. The statute states that employers "shall furnish housing," either by providing housing that meets applicable Federal safety standards or by securing housing that meets the local standards for rental and/or public accommodations. 8 U.S.C. 1188(c)(4). The housing must be provided or secured "in accordance with regulations," id., and the legislative regulations implementing this requirement state that the "employer must provide housing at no cost to the H-2A workers." 20 C.F.R. 655.122(d)(1). The statute further requires that the "determination as to whether the housing furnished by an employer for an H-2A worker meets the requirements" of the statute must be made prior to the Secretary's decision whether to issue a labor certification allowing the employer to seek H-2A workers. 8 U.S.C. 1188(c)(4).

  1. Housing that an H-2A Employer is Required by Law to Provide Free of Charge is an Employer Business Expense

    1.    The district court's decision is flawed because it fails to evaluate which party was the primary beneficiary of the housing that Bland was required by the H-2A program to provide or secure free of charge. See DeLuna-Guerrero v. North Carolina Grower's Ass'n, Inc., 338 F. Supp. 2d 649, 657 (E.D.N.C. 2004) ("[T]he ultimate issue before the court is whether the [] costs here were primarily for the benefit or convenience of the employer.").

    As the regulations implementing section 3(m) demonstrate, employer business expenses must be viewed as primarily for the benefit of the employer. This is true whether the business expense is a uniform or tool of the trade, see 29 C.F.R. 531.3(d)(2), or is an expense the employer is required by law to bear, such as worker's compensation, unemployment compensation, or taxes. See 29 C.F.R. 531.32(c) and 531.38.

    The H-2A program requires employers to provide or secure housing for their H-2A employees that meets applicable safety standards. See 8 U.S.C. 1188(c)(4). The employer must provide or secure that housing free of charge. See 20 C.F.R. 655.122(d)(1). This requirement, unique to the H-2A program, renders the housing an employer business expense, as a matter of law, for purposes of section 3(m). Additionally, the requirement for such free housing is an inherent and inevitable result of the employer's decision to participate in the H-2A program. Cf. Arriaga, 305 F.3d at 1242. The H-2A employees are foreign workers coming into the country for temporary employment. They obviously will have no permanent housing of their own. And their work for the H-2A farmers typically takes them to remote, rural locations, where their housing is under the control of their employers. Further, these H-2A guest workers have limited rights when they arrive. They may enter the country only for temporary agricultural employment of less than 12 months, absent extraordinary circumstances. See 20 C.F.R. 655.170(b). Moreover, they have no right to transfer to other U.S. employers, or to remain in the country if they quit or after their work contract period expires, unless they have secured subsequent temporary agricultural employment under the H-2A visa program. See 20 C.F.R. 655.122(n) and 655.135(i). Given these circumstances, employers benefit far more than usual from the expenses incident to the employment relationship, and employees benefit less than normal from the job. Accordingly, the employer must be viewed as the primary beneficiary of this business expense under section 3(m), and an H-2A employer may not take section 3(m) credit for such a legally required expense. [4]

    2.    The Wage and Hour Division's Field Operations Handbook ("FOH") specifically addresses the application of section 3(m) to lodging expenses in these particular circumstances. The FOH states with regard to the wages of migrant and seasonal agricultural workers that an employer may generally take credit for "[l]odging used by a worker, including utility costs, unless required to be provided free of charge pursuant to the employment contract or applicable law." FOH, 30c13(a)(4), www.dol.gov/whd/FOH (emphasis added) (copies of the relevant pages of the FOH are attached in Addendum). The FOH also states that "[l]odging, like meals, is ordinarily considered for the benefit and convenience of the employee. Circumstances may exist, however, where housing is of little benefit to employees, as where an employer requires an employee to live on the employer's premises to meet some need of the employer, or where the employee must travel away from home to further the employer's business." FOH, 30c03(a)(2); cf. Skidmore v. Swift & Co., 323 U.S. 134, 137 (1944) ("Living quarters may in some situations be furnished as a facility of the task and in another as a part of its compensation."). With regard to migrant and seasonal agricultural workers, the FOH states that no credit may be taken where: workers are required to live on the premises as a condition of employment or where for other reasons the housing primarily benefits the employer; the housing fails to meet substantive safety and health standards and has been denied an occupancy permit; or MSPA civil money penalties have been assessed for a substantive safety and health violation. See FOH, 30c13(a)(4)(a)-(c); see also FOH, 30c02(b) (facilities furnished in violation of any law, such as housing denied an occupancy permit or which resulted in MSPA civil money penalties, are not considered customarily furnished); 29 C.F.R. 531.31 (same).

    3.    Other Wage and Hour Division guidance interpreting section 3(m) also provides support for the principle enunciated in the FOH that an employer may not take credit for lodging required to be provided by law. See Wage and Hour Opinion Letters dated August 19, 1997, 1997 WL 998029 (stating with regard to the hiring of an employee on an au pair visa that "an employer may not take credit for facilities which the employer is required by law or regulation to provide") (copy attached in Addendum); June 16, 1975 (where state law limits the housing credit to a maximum of $140 per month, even though the reasonable cost or fair value is $400 per month, "the law providing the greater compensation to the employee will prevail" and the state law will govern the amount of credit allowed in computing the wage paid for FLSA minimum wage purposes) (copy attached in Addendum); Sept. 18, 1959 ("Costs of medical care required to be furnished by law, such as by workmen's compensation laws, must be excluded.") (copy attached in Addendum); and Oct. 12, 1943 ("The employer will be deemed to have received a benefit if the deduction [for a hospitalization prepayment plan] is used to pay for hospitalization for which the employer would be required by law to pay.") (copy attached in Addendum). Similarly, the Wage and Hour Division's enforcement practices provide further support for the principle that an employer may not take credit for expenses it is lawfully required to bear. See Soler v. G& U, Inc. and Secretary of Labor, 768 F. Supp. 452, 462 (S.D.N.Y. 1991) (on remand from the Second Circuit, upholding Wage and Hour's refusal to allow any credit for the value of heating fuel provided to the workers, because state law required that the fuel or power necessary to heat a room to 68 degrees "shall be provided free of charge to the occupants").

    4.    Therefore, the Department's clear and longstanding position is that an employer may not take a section 3(m) credit for payments that it is required by law to make. Specifically, because an employer is not permitted to operate its business in violation of the law, expenses imposed on the employer by law must be viewed as business expenses that are primarily for the benefit of the employer. This interpretation of section 3(m) is entitled to deference, as the Department is the agency charged with administering and enforcing the FLSA and the interpretation is a reasonable one. See Skidmore v. Swift & Co., 323 U.S. at 140 (the Administrator's FLSA interpretations "constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance"); see also Federal Express Corp. v. Holowecki, 552 U.S. 389, 399 (2008); Resias Polycarpe, et al. v. E& S Landscaping Service, Inc., et al.,___ F.3d ___,2010 WL 3398825, at *7 (11th Cir. 2010) (giving deference to the Department's FLSA interpretation set forth in an amicus brief and opinion letter); Bonilla v. Baker Concrete Construction, Inc., 487 F.3d 1340 1342-43 (11th Cir. 2007) (giving deference to the Department's interpretive statements); Morante-Navarro v. T& Y Pine Straw, Inc., 350 F.3d 1163, 1169-70 (11th Cir. 2003).

    5.    The Secretary's analysis is fully consistent with, and does not in any way diminish, section 3(m)'s allowance for a credit for lodging. But, as explained supra, that allowance must ultimately be viewed in the context of a "primary benefit" analysis. The district court here erred when it failed to recognize that, while section 3(m) creates a presumption that the employee is the primary beneficiary of employer-provided lodging, the presumption can be rebutted. As the Second Circuit stated in Soler, 833 F.2d at 1109, although section 3(m) creates a presumption that housing facilities ordinarily should be included in an employee's regular rate of pay, an exception to this presumption exists in special circumstances where the facilities are primarily for the benefit or convenience of the employer under 29 C.F.R. 531.3(d)(1). The court in Soler recognized that special circumstances may exist, for example, where lodging is of little benefit to an employee, such as when an employer requires an employee to live on-site to meet a particular need of the employer, or when an employee is required to be on call at the employer's behest. However, "[r]ecourse to the Regulation's protection is best left to the Administrator's judgment based on the facts of particular cases submitted to him." Id. at 1110. Where the statutory presumption is rebutted, "the Administrator is empowered to find that the cost of on-site housing is not reasonable, and therefore may not be subsumed within an employee's wage." Id. By contrast, the district court here concluded that Bland was entitled to credit under section 3(m) simply because the housing was customarily furnished. See Ramos-Barrientos, 2010 WL 2521041, at *5.

    Numerous other courts have applied the general principle that section 3(m) creates only a rebuttable presumption and, finding the presumption rebutted, have disallowed a housing credit under section 3(m). For example, courts have found the presumption rebutted where, due to the nature of an employee's job duties, the lodging was primarily for the benefit of the employer. See Masters v. Maryland Management Co., 493 F.2d 1329, 1333-34 (4th Cir. 1974) (housing provided to employee of apartment management company who resided on the premises to be on call for up to 24 hours a day was primarily for the benefit of the employer); Jiao v. Shi Ya Chen, 2007 WL 4944767, at **13-14 (S.D.N.Y. 2007) (presumption that section 3(m) credit should be allowed for lodging was rebutted where it was primarily for the benefit of the employer because the employee was required to live at the hotel to assist guests through the night); Marshall v. DeBord, 1978 WL 1705, at **5-6 (E.D. Okla. 1978) (housing was primarily for the benefit of the employer because the employees were required to live at the nursing home and be available 24 hours a day and, therefore, no credit was allowed); and Bailey v. Pilots' Ass'n for the Bay and River Delaware, 406 F. Supp. 1302, 1305 (E.D. Pa. 1976) (housing was primarily for the benefit of the employer because the employee was required to remain on board the pilot boat for seven days at a time); cf. Marshall v. Truman Arnold Distributing Co., 640 F.2d 906, 909 (8th Cir. 1981) (utilizing a primary benefit analysis, but concluding under the particular facts presented that the housing was primarily for the benefit of the employees where it was the result of voluntary contractual negotiations between the parties, even though gas stations received some benefit because the employees' presence deterred crime and vandalism).

    Courts also have refused to allow any credit for lodging where the housing was substandard or otherwise in violation of the law. See Chellen v. John Pickle Co., Inc., 446 F. Supp. 2d 1247, 1279 (N.D. Okla. 2006) (no section 3(m) lodging credit allowed for housing that is "seriously substandard"); Archie v. Grand Central Partnership, Inc., 86 F. Supp. 2d 262, 270 (S.D.N.Y. 2000) (no credit allowed for lodging furnished in violation of state law); Castillo v. Case Farms of Ohio, Inc., 96 F. Supp. 2d 578, 637-40 (W.D. Tex. 1999) (no credit allowed for housing that is seriously substandard or provided in violation of law); Soler v. G& U, Inc., 768 F. Supp. at 465-55 (no credit allowed where migrant farm workers' camp was operated in violation of its state permit due to overcrowding); Strong v. Williams, 1980 WL 8134, at *5 (M.D. Fla. 1980) (no credit allowed for housing provided to migrant farm workers in violation of state law); see also Leach v. Johnston, 812 F. Supp. 1198, 1213 (M.D. Fla. 1992) (no credit allowed for alcoholic beverages provided to employees in violation of state law). Thus, although section 3(m) specifically refers to "lodging," it should be construed to establish a presumption that an employer may take credit for housing in ordinary circumstances, but that such presumption may be rebutted.

    Indeed, decisions of this Court are consistent with the conclusion that section 3(m) creates only a rebuttable presumption. For example, in Davis Brothers, Inc. v. Donovan, 700 F.2d 1368 (11th Cir. 1983), the Court discussed approvingly cases where credit had been disallowed for food or lodging. Citing cases that involved "grossly inadequate facilities for which employers sought excessive credit," this Court concluded, "[a]s one might expect, the court denied the employer any credit." Id. at 1371. Similarly, in Arriaga, 305 F.3d at 1241 n.16, this Court cited with approval two of the cases listed supra (Masters and Bailey), which held that lodging was not includable as wages because it was primarily for the benefit and convenience of the employer.

    6.    Allowing a contrary result would effectively negate the H-2A requirement to furnish housing free of charge and diminish the employees' entitlements under that law. Moreover, such a result would be in tension with section 18(a) of the FLSA, which provides that nothing in the FLSA "shall excuse noncompliance with any Federal or State law or municipal ordinance establishing a minimum wage higher than the minimum wage established under this chapter." 29 U.S.C. 218(a). As the district court concluded in Soler, when deferring to the Wage and Hour Administrator's interpretation with regard to a state law requiring that heating fuel "shall be provided free of charge," such a law effectively establishes a higher minimum wage than the FLSA. Although normally section 3(m) would allow an employer credit for heating fuel provided for the employee's personal use, see 29 C.F.R. 531.32(a), under section 18(a) the conflict with the normal rule must be resolved by requiring the employer to comply with the higher minimum wage. See 768 F. Supp. at 462-63.

CONCLUSION

    For the foregoing reasons, the Secretary requests that this Court reverse the district court and hold that an H-2A employer may not take credit toward the FLSA minimum wage for the cost of the housing that it is required to furnish to its employees free of charge, because such expenses are primarily for the benefit of the H-2A employer.

Respectfully submitted,

M. PATRICIA SMITH
Solicitor of Labor

WILLIAM C. LESSER
Acting Associate Solicitor

PAUL L. FRIEDEN
Counsel for Appellate Litigation

___signed_______
DIANE A. HEIM
Attorney
U.S. Department of Labor
Office of the Solicitor
Room N-2716
200 Constitution Avenue, NW
Washington, DC 20210
Phone: (202) 693-5555
Fax: (202) 693-5774
E-mail: heim.diane@dol.gov

CERTIFICATE OF COMPLIANCE

    This Brief complies with the length limitation set forth in Federal Rules of Appellate Procedure 35(b)(2) and 40(b) because it does not exceed 7,000 words (excluding the parts of the Brief exempted by Federal Rule of Appellate Procedure 32(a)(7)(B)(iii)).

    This Brief also complies with the typeface and type-style requirements of Federal Rule of Appellate Procedure 32(a)(5) and 32(a)(6). This Brief was prepared using Microsoft Office Word utilizing Courier New 12 point and a monospaced font.

___signed_______
DIANE A. HEIM
Attorney

CERTIFICATE OF SERVICE

    I hereby certify that on October 13, 2010, a copy of the Brief for the Secretary Of Labor as Amicus Curiae in Support of Plaintiffs-Appellants was filed with the Clerk of the Court by mailing the original and six copies via UPS overnight mail to the Clerk of the Court at the following address, and one copy was served upon the following counsel by overnight UPS mail:

Clerk, U.S. Court of Appeals
Appeal No. 10-13412-CC
Eleventh Circuit Court of Appeals
56 Forsyth Street, N.W.
Atlanta, Georgia 30303

William E. Dillard
Wiley A. Wasden, III
Brennan & Wasden, LLP
P.O. Box 8047
Savannah, Georgia 31412

Gregory S. Schell
Daniela Dwyer
Migrant Farmworker Justice Project
508 Lucerne Avenue
Lake Worth, Florida 33460-3819

Robert J. Willis
Post Office Box 1269
Raleigh, North Carolina 27602

James M. Knoepp
Immigrant Justice Project
Southern Poverty Law Center
233 Peachtree Street, N.E.
Suite 2150
Atlanta, Georgia 30303

Weeun Wang
Farmworker Justice
1126 16th Street, N.W.
Suite 270
Washington, D.C. 20036

___signed____
Diane A. Heim
Attorney
U.S. Department of Labor


Footnotes

[1]    The H-2A visa program, see 8 U.S.C. 1101(a)(15)(H)(ii)(a), is a voluntary program that allows employers to bring foreign workers into the United States in very limited circumstances, and only after the United States Department of Labor ("Department") has certified that there are not enough able and qualified U.S. workers available for the position, and that the employment of foreign workers will not adversely affect the wages and working conditions of workers in the U.S. who are similarly employed. See 8 U.S.C. 1188(a)(1); 20 C.F.R. 655.100.

[2]    The Secretary's participation as amicus is limited to the issue of whether an employer may take credit toward the FLSA minimum wage for housing it is required by law to provide free of charge.

[3]    The regulations governing the H-2A program were updated on February 12, 2010. See 75 Fed. Reg. 6884. Because there have been no substantive changes in the relevant H-2A regulations compared to the regulations in effect during the time period covered by this case, the citations in this brief refer to the current version of the regulations.

[4]    The design of the H-2A program further confirms that the employer is the primary beneficiary of the required H-2A housing. The program imposes significant obligations on employers who seek to bring foreign guest workers into the U.S. to perform temporary agricultural work. For example, employers are obligated to follow a number of prescribed recruiting steps (e.g., submit a job order to the appropriate State Workforce Agency for posting; advertise the job in the newspaper for at least two days, one of which must be a Sunday; and contact laid-off U.S. employees and offer them the job). See 20 C.F.R. 655.121 and 655.151-.153. Employers also must offer and pay at least the prevailing wage or adverse effect wage rate; offer full-time employment; and guarantee workers wages for at least three-quarters of the hours set forth in the work contract period. See 20 C.F.R. 655.122(i), 655.122(l) and 655.135(f). The Department issues a labor certification authorizing employers to proceed with the H-2A visa program only if all these steps demonstrate both that there are not sufficient qualified U.S. workers available to the employer to perform the work, and that hiring H-2A workers will not adversely affect the wages and working conditions of U.S. workers similarly employed. See 20 C.F.R. 655.100 and 655.103(a).