Cut-out Summary
ALBERSTONE & ALBERSTONE
DALE S. ALBERSTONE, ESQ.
1900 Avenue of the Stars, Suite 650, Los Angeles, CA 90067
TELEPHONE: (310) 277-7300 FAX: (310) 277-7307
Apartment Managers: Wage, Hour and Rent Laws for 2016
1. General Rules:
A. Minimum wage compensation for a manager is $10.00/hour for each hour worked starting January 1, 2016.
B. Overtime: Overtime of 1½ times hourly rate ($15.00) must be paid if more than 8 hours per day, 40 hours per week, or 6 consecutive days.
C. If the Manager is not required to live at the property of an under 16 unit building, but the Manager chooses to live there, then any rent may be charged.
D. If the Manager is required to live at the property, regardless of the number of units, the rent paid by the Manager may not exceed the monthly sum of
$564.81 for a single manager, or $835.49 for a couple.
E. If no rent is charged, the Manager’s wages may be offset by up to 2/3 the ordinary rental value, but no more than $564.81 (one Manager) or $835.49
(couple) per month.
2. Qualifications to General Rules:
A. Under 16 Units: If less than 16 units and the Manager is not required to live at the property, then Manager can be charged any rent, even if greater than
$564.81 or $835.49. But $10/hr. minimum wage must be paid to Manager without offset if full rent is charged. Dollar-for-dollar wage reduction is
allowed in payment of minimum wage up to $564.81 or $835.49 (but not exceeding 2/3 the unit’s value) if the rent is only partially reduced.
B. 16 Units or More:
Exception No. 1: “Offset of Wages”: Manager’s wages may be reduced by the lesser of (1) 2/3 the unit’s rental value, or (2) $564.81 per month (one
Manager) or $835.49 per month (couple) if no rent is paid. Dollar-for dollar wages reduction if only a partial rent reduction. Manager’s wages may not be
offset by more than $564.81 or $835.49 even though the apartment might be worth significantly more.
Exception No. 2: “Check Exchange: Manager may pay up to 2/3 the value of the unit as rent (without regard to $564.81 and $835.49 limitations)
provided that separate checks are exchanged for the Manager’s payment of rent and Owner’s payment of wages. Thus, the Owner must pay manager the
full minimum wage ($10.00 for all hours worked) and the Manager must pay Owner an amount not exceeding 2/3 the rental value by separate checks.
C. Cities With Higher Minimum Wages: If the apartment complex is located in a city with a local minimum wage higher than the statewide minimum
wage, then the employing Owner must compensate the Manager based on the higher wages. Example: Los Angeles: Less than 26 employees: $10.50
starting July 2017; $12 July 2018, etc.; 26+ employees: increases start July 2016.
D. Managers are Employees: Resident Managers are employees, not independent contractors of the Owner. That is true even if the Resident Manager
Agreement specifies that the Manager as an independent contractor. The agreement cannot override the law.
3. Penalties for Non Compliance:
Liquidated damages to the Manager equal to the unpaid minimum wage for the past 3 years, plus Manager’s attorney fees, among others! Total exposure of
$100,000 to $200,000 or more.
4. Sick Leave: Must provide a minimum of 3 days or 24 hours paid sick leave per year, but the law requires more days if the written agreement is not prepared
properly.
5. Cell Phones: Must reimburse Manager reasonable amount for business use if cell phone is required. No reimbursement of cell phone is necessary if not
required.
6. Recommendations:
A. Sign a Contract: No offsets to the minimum wage are allowed unless the Manager voluntarily signs a written contract with Owner providing forsuch offsets!
B. Update all Contracts: Review and update all contracts to be consistent with all 2016 laws.
C. Management Certification: Require Manager to record all hours worked, initial and deliver such report to Owner.
D. Record Keeping: Keep accurate records of all matters concerning hiring, hours worked and firing of Managers, as well as the Manager’s monthlycertification of hours worked.
E. Posting: Post manager’s name and address in conspicuous place at the building.
NOTE: As used herein, “Owner” means the Manager’s employer and includes a management company employer. For a fuller discussion of these laws and certain exceptions, see the January 2016 issue of AOA Magazine or contact Mr. Alberstone.