DALE S. ALBERSTONE, ESQ.
ALBERSTONE & ALBERSTONE
269 S. Beverly Drive, Suite 1670, Beverly Hills, CA 90212
TELEPHONE: (310) 277-7300 FAX: (310) 277-7307
Resident Managers: California Wage, Hour and Rent Laws for 2019
(for owners and management companies who employ less than 26 total employees)
1. General Rules:
A. California minimum wage for a resident manager is $11.00/hour for each hour worked during 2019.
B. California Overtime: Overtime of 1½ times hourly rate ($16.50) must be paid if the manager works more than 8 hours per day, 40 hours per week, or six 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 amount of rent may be charged.
D. If the Manager is required to live at the property as a condition of employment, regardless of the number of units, the rent paid by the Manager may not exceed the monthly sum of $621.29* for single Manager or $919.04* for a couple.
E. If no rent is charged, the Manager’s wages may be credited by up to 2/3 the ordinary rental value of the unit, but no more than $621.29* (1 Manager) or $919.04* (couple) per month.
F. Resident Managers are employees, not independent contractors, of the owner or management company.
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 $621.29* or $919.04*. But the $11.00/hr. minimum wage must be paid to Manager without offset if full rent is charged. A dollar-for-dollar wage reduction is allowed as payment of minimum wage up to $621.29* or $919.04* (but not exceeding 2/3 the unit’s value) for every dollar the rent is reduced.
However, this dollar-for-dollar wage reduction only applies if a written employment contract provides for this.
B. 16 Units or More:
(a) Exception to Wage Payments: “Offset of Wages” In lieu of paying the full minimum wages, Manager’s wages may be reduced by the lesser of (A) 2/3 the unit’s rental value, and (B) $621.29* per month (1 Manager) or $919.04* per month (couple) if no rent is paid.
If only partial rent is charged, then for each dollar rent reduction, wages may be credited by one dollar up to $621.29* (1 manager) or $919.04* (couple) even though the apartment might be worth significantly more. This exception only applies if the Manager signs an agreement which provides for the offset.
Exception to Maximum Rent: “Check Exchange” If the Manager is required to live on site, then Manager may pay rent up to 2/3 the fair rental value of the unit (without regard to $621.29* and $919.04* limitations) provided that separate checks are exchanged for the Manager’s payment of rent and employer’s payment of wages. Thus, the employer must pay manager the full minimum wage ($11.00 for all hours worked) and the Manager must pay employer an amount not exceeding 2/3 the fair market rental value by separate checks.
C. Cities With Higher Minimum Wages: If the apartment is located in a city with a local minimum wage higher than the statewide minimum wage, then the employer must compensate the Manager based on the higher rates. Examples: Los Angeles and Santa Monica: presently $12/hr. but $13.25/hr. starting July 1, 2019. San Francisco: presently $15/hr.
3. Sick Leave: Must provide a minimum of 3 days or 24 hours (48 hours in Los Angeles) paid sick leave per year, but more days if the written agreement is not prepared properly.
4. Cell Phones: Must reimburse Manager reasonable amount for business use if a personal cell phone is required by the employer. No reimbursement of cell phone is necessary if not required.
5. Penalties for Non Compliance:
Liquidated damages for the Manager which then doubles the unpaid minimum wage for the past 3 years, plus 1 additional year which is not doubled, plus Manager’s attorney fees, court costs, statutory interest, among others! Total civil exposure of $100,000 to $200,000 or more. Also, violation of wages laws can be a misdemeanor with $1,000 fine and/or 6 months imprisonment.
A. Sign a Contract: No rent reduction credit to the minimum wages owed is allowed unless the Manager voluntarily signs a written agreement which provides for such a credit!
B. Update all Contracts: Review and update all contracts to be consistent with all 2019 California laws and the applicable City ordinances.
C. Management Certification: Require Manager to record all hours worked (as well as total monthly hours), sign, certify and deliver such report to the employer every month.
D. Record Keeping: Keep accurate records of all matters concerning hiring, hours worked, firing of managers and monthly rent paid.
E. Posting: Post the various wage orders and sick leave notifications on the premises as required by California law and local municipalities.
NOTE: This “Cut Out Summary” is a general discussion of only California law and may not apply to the reader’s particular situation. Other laws may qualify or restrict California law. For a fuller discussion of these laws and the various exceptions, please contact Mr. Alberstone.
*These amounts are projections. The actual amounts may vary by one or two cents once the new figures are published for 2019. .