In O’Brien v. Travelers Inn, LLC (2018AP1483), the Court of Appeals District IV held that employees are entitled to the minimum wage minus a statutorily set lodging deduction, regardless of the value of the lodging provided.

Travelers Inn compensated employee Deborah O’Brien solely with lodging at a value of $500 per month. Divided by the number of hours O’Brien worked, the value of the lodging equaled $12.17 per hour, which is above the minimum wage. However, Wisconsin statutes and administrative code require a maximum lodging deduction of $58 per week or $8.30 per day (Wis. Stat. § 104.035(1)(b)1.; Wis. Admin. Code § DWD 272.03(3)(a)1.).

Although the value of the lodging was more than the maximum allowable lodging deduction, the court held that Travelers could only deduct the maximum $58 per week or $8.30 per day from the minimum wage owed to O’Brien. Therefore, Travelers owed O’Brien wages beyond the lodging. The court held that Wisconsin statutes do not allow Travelers to contract out of the minimum wage and maximum lodging deduction obligations.

Additionally, the court found that Travelers could not claim a lodging deduction under federal law because it did not comply with record keeping requirements. The court awarded O’Brien back pay and liquidated damages and stated she is entitled to attorney fees under federal law.