SERVICES FURNISHED TO EMPLOYEES - 8599

(New, renumbered from 11000, 11010, 11020, 11030 and 11040)

This section provides information and guidance to agencies/departments that may furnish services such as meals, laundry services, dry cleaning, and rental of living quarters to employees.

Per Government Code sections 19815.4 (d) and 19822, the Department of Human Resources (CalHR) shall determine the fair and reasonable value of maintenance, living quarters, housing, meals, food, and other services furnished by the state as an employer to its employee.  All services furnished to employees must comply with the California Code of Regulations, Title 2, Division 1, Chapter 3, Subchapter 1, Article 3, sections 599.640 - 599.652.

Payment shall be made or payroll deduction shall be arranged when the service is received.  Form STD. 650 is used to set up maintenance deduction. Form STD. 650 is also used when a credit is owed to an employee and requires approval from the designated employee or manager. Refer to the State Controller's Office Payroll Procedure Manual, section H650 for instruction.

Payments from employees will be entered as a credit to expenditures, Account 5XXXXXX (Legacy Account 9000) and remitted to the support appropriation current at the time the employee received the services, unless otherwise specified by law.

If cash is used in exchange for services such as purchasing a meal, internal control principles for cash shall be followed.  See SAM sections 8080.1 and 20060.  Agencies/departments will collect sales tax on meals and food products unless exempt according to Revenue and Taxation Code section 6363.

In applying rental rates there is a tax liability if the employee is paying rent below fair market value. Refer to CalHR Human Resources Manual section 2301 for information regarding the reporting and tax withholding requirements associated with employer-provided housing/lodging.

Agencies/departments shall ensure that adequate records for services furnished to employees are retained in accordance with the agencies'/departments’ records retention schedule.  See SAM Chapter 1600.