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Good employee accommodation on a farm is vital for maintaining a positive relationship between employer and employee. This page explains the various aspects of farm accommodation, from legal requirements to mutual expectations. As an employee, you need to ask key questions about rent, bond, maintenance, and property insurance. As an employer, you have specific legal obligations including complying with healthy home standards and lodging a bond with Tenancy Services. Whether you're an employee or an employer, understanding these responsibilities can make the accommodation aspect of working on a farm clear and agreeable.
Good employee accommodation is warm, dry and safe, with functioning appliances, and contributes to positive employer-employee relationships.
It’s essential that accommodation expectations and legal requirements are understood by both parties.
Farm accommodation can vary immensely; you may be offered a house on your own, a house to share with other staff, or the option to live off farm in a house of your choice.
Always walk through the accommodation on offer by a potential employer before agreeing to live there and ask these key questions:
You are considered a landlord if your employees pay you rent as part of their employment agreement. As a landlord, you have legal obligations and requirements as part of healthy home standards - including insulation requirements and working smoke alarms.
There must be a signed Service Tenancy Agreement (the correct agreement for providing on-farm accommodation) between you and your employee. You are entitled to ask for a bond and this must be lodged with Tenancy Services within 23 days.
As a landlord, you are legally required to tell tenants if the property is insured or not and the amount of excess that the tenant may be liable for if they cause damage to the property they live in. This is done with an insurance statement as part of any new service tenancy agreement.
Before staff move in, a property inspection report for each room needs to be completed together by the employer and employee and any existing damage recorded; take photos of any damage and file with the inspection report as a reference. This is a good time to discuss and agree with your employee on tasks you would like done and how often such as mowing lawns at least fortnightly, for example.
Conduct regular property inspections to check for any issues that require maintenance and/or damage. Be realistic about what is damage and what would be considered normal wear and tear.
Good employers and landlords value accommodation fairly. The IRD require fair market rent is charged for accommodation provided to employees. The tenancy services website describes market rent as ‘the amount a landlord might reasonably expect to receive and a tenant might reasonably expect to pay, for a tenancy’. Rent needs to be similar to the rent charged for similar properties in similar areas. Check out the market rent calculator.
The preferred method of setting remuneration in dairy is that either a salary or a wage is paid to the employee which accurately reflects their skills and experience. From this salary/wages rent may be deducted if both parties agree and it is in writing and signed.
In relation to both minimum wage and any minimum wage thresholds set by immigration policy the rent is recognised as a contributing remuneration source, ie the hourly thresholds can include the rent component.
In the case of both New Zealand minimum wage and immigration wage minimums the wages must be paid for every hour worked on the farm, within each week for immigration and within each pay period for minimum wage (but never more than a fortnight). Wages cannot be averaged over a season.
Accommodation is usually included in the Total Package Value (TPV), or total earnings offered by an employer as part of the terms and conditions of employment.
To fulfil IRD requirements an employer can either:
Options 1) and 2) are essentially the same, there is just more paperwork in option 2). Option 3) is the only method which can be considered free rental. Option 1 is the recommended option as it provides the most transparency for both parties.
The amount of rent paid for accommodation must be clearly written into the employment agreement and the employee must agree in writing to the deduction of rent from their wages. If they don’t agree then an employer can’t deduct it.
Find out about employment agreements and why you must have them. Make sure your agreement includes any accommodation or other wage deductions and that they are specific.
The sharemilker should not have to pay the farm owner rent for any houses supplied, as long as they are being used for staff that are working on the farm. This is considered part of the infrastructure of the business, the same as any other building e.g. cowshed or calf sheds.
If you are a sharemilker or contract milker, you are the landlord and can charge rent for the properties supplied. You are responsible for conducting property inspections and for any damage from tenants.
The farm owner is responsible for any capital structural requirements, such as meeting insulation standards. The sharemilker or contract milker is responsible for managing the tenancy on a day-to-day basis e.g. checking smoke alarms are working and conducting property inspections.
Between farm owners and sharemilkers/contract milkers:
It is important for farm owners and their sharemilker or contract milker to discuss who will be liable to pay for damages. Standard contracts don’t currently take this into account. As it stands, if a house is destroyed or damaged, the sharemilker or contract milker could be responsible for the whole cost to repair or replace.
Have the discussion as soon as possible, and have the outcome that you’ve both agreed to included in your contract. Your insurance companies should both be included in the discussion as each company will have its own requirements and will have the experience to make sure each party is covered and not unfairly penalised in the event of damage.
Between landlord and tenant:
Who is responsible for fixing the damage depends on who caused it.
Tenants must tell the landlord straight away if they are aware something needs to be repaired or maintained, no matter how it happened or who caused the damage. Find out more at Repairs and damages » Tenancy Services.