Rev. Rul. 80-41

                       Internal Revenue Service
                                 Revenue Ruling

               MEALS FURNISHED TO HOTEL AND RESTAURANT EMPLOYEES

                                Published:  1980

SECTION 3121.--DEFINITIONS, 26 CFR 3.3121(a)-1: Wages

(Also Section 3306;  31.3306(b)-1.)

  Meals furnished to hotel and restaurant employees. The Service will not follow the Hotel Conquistador decision holding that the value of certain meals furnished without charge to hotel and restaurant employees was not wages under the FICA and FUTA.

ISSUE

  In Hotel Conquistador, Inc. v. United States, 597 F.2d 1348 (Ct.Cl.1979), cert. denied January 14, 1980, the Court of Claims held that the value of certain meals furnished without charge to hotel and restaurant employees was not "wages" under sections 3121(a)

and 3306(b) of the Internal Revenue Code.

  It is the long standing position of the Service that the value of meals furnished without charge, for example, to hotel or restaurant employees, or to seamen or other employees aboard vessels, is wages under sections 3121(a) and 3306(b) of the Code.  This position has been supported by the courts in S.S. Kresge Co. v. United States, 379 F.2d 309 (6th Cir.1967), concerning free meals furnished to lunch stand employees, and Pacific American Fisheries, Inc. v. United States, 138 F.2d 464 (9th Cir.1943), concerning the value of board and lodging furnished to salmon packing plant employees.

  For these reasons, the Service will not follow the decision of the United States Court of Claims in the Hotel Conquistador case, and employers must continue to treat the value of such free meals furnished to their employees as wages under sections 3121(a) and 3306(b) of the Code.

Rev. Rul. 80-41, 1980-1 C.B. 211.