Hello everybody. Over the years, I have authored many articles for AOA members regarding the employment of resident managers.But two aspects I have not previously discussed are the rest periods and meal breaks the law requires owners and management companies to provide to their resident managers.It is timely to address rest and meal periods because on April 30, 2020 the California Court of Appeal gave them specific attention.
On that date the appellate court issued its opinion on those issues after a waitress who worked at Fleming’s Steakhouse on Olympic Boulevard in Los Angeles settled a lawsuit with the restaurant for $15,375 for the employer’s failure to provide the server with rest periods and meal breaks and the Superior Court thereafter awarded her $280,000 as attorney fees against Flemings!
So this month, let’s discuss rest period and meal break laws, after which I will add some general comments and make recommendations to AOA members.
Managers are Employees
To start, please recall that resident managers in apartment buildings are employees. They are not independent contractors. As employees, managers do not receive 1099s. As employees, managers are protected by numerous wage and hour laws which often do not apply to independent contractors.
Among those protections are the rights of resident managers (as well as the rights of other on-site resident employees, such as caretakers and janitors) to receive rest breaks and meal periods if certain conditions are met.
Rest Period Laws
The controlling legal authority is IWC Order 5-2001. It provides that every employer (which includes owners and management companies) must permit their managers to take certain rest periods. Insofar as practicable, those rest periods are to be in the middle of each work period.
The rest period time is based on the total hours worked daily at the rate of 10 minutes of rest time per each 4 hours worked “or major fraction thereof.” However, a rest period is not required if the manager’s daily work time is less than 3-1/2 hours.
Rest period time is counted toward hours worked, meaning that the manager must be compensated for that time. If the employer fails to allow a required rest period, the manager is entitled to receive one full hour of pay.
For a rest period to be proper, the manager must be relieved of all duties during the 10 minute period and must not perform any work for the employer.
Meal Period Laws
Employers are also required to provide their managers with 30 consecutive minutes as a meal break if the manager will work more than 5 hours on any given day.
There is one exception to that requirement. If the manager will work more than 5 but not more than 6 hours for the day, then the meal period may be waived by the mutual consent of the employer and the manager. The reason for this exception is that some employees would prefer to work 6 hours straight and then be off work, rather than be required to take a 30 minute meal break at the end of 5 hours and then return for one more hour of work.
Unlike required rest periods, a meal break is not counted toward hours worked and the law does not require that the manager be paid for the 30 minute meal period taken.
However, if the employer does not provide the manager with a required meal break, then the employee is entitled to one hour of pay for each meal period that is not provided.
During the 30 minute meal period, the manager must be relieved of all duties and not perform any work for the employer.
The Good News
With the rules for rest periods and meal breaks now in mind, here is the good news: They usually will not apply to any given manager, at least as to buildings under, say, 25 or so units.
That is because few resident managers in small buildings work more than 3-1/2 hours on any day, let alone work more than 5 hours during a day. Why not?
It is because the “hours worked” by an on-site manager are only counted for the time the manager is actually “carrying out assigned duties.” That means that a manager’s waiting time, on-call time and standby time while at the property are not considered to be hours worked by the manager. The manager is only “waiting” to work, but not actually working.
For example, assume that a manager advertises an open house to show a vacancy from 9 a.m. to 5 p.m. next Saturday. Also assume the manager waits around all day at the property for potential renters to show up, but only one comes by and the manager spends 15 minutes exhibiting the unit to the applicant.
Only the 15 minutes that the manager spent would be considered to be “hours worked.” The remaining 7-3/4 hours was waiting time. The manager was not carrying out assigned duties. He/she was merely waiting to work.
Our courts have reasoned that because the manager lives in the building, he or she is at home and therefore free to engage in his/her own personal activities while waiting to work. So waiting time does not count toward hours worked. Hours worked is only the time the manager is actually carrying out assigned duties. [Attorneys may research this point in Von Nothdurft v. Steck (227 C.A.4th 524, 539), and related cases.]
The reality is that it will be unlikely that a manager, at least in smaller buildings, will actually work more than 3-1/2 hours on a given day, and even less likely that the manager will work more than 5 hours on any day. Such limited hours exempt most managers from having to be provided with rest periods or meal breaks.
One concluding note about the Fleming’s Steakhouse case: The Court of Appeal let stand the $15,375 settlement for failure to provide meal and rest periods, but for technical reasons, disallowed the attorney’s fees.
General Comments and Recommendations
The employment of resident managers has become quite technical and complex, with numerous laws regulating the maximum rent they can pay, the allowable hours they can work, and the wages they must be paid.
For example, the general rule for 2020 is that $677.75 is the maximum monthly rent that can lawfully be charged to a single manager who is required to live on site as a condition of employment. If a couple living in the same unit is employed as the manager, the maximum monthly rent for 2020 is $1002.56.
But there are exceptions to those rules. For a detailed discussion of the exceptions, please review my column entitled “New Resident Manager Laws for 2020” in the January 2020 issue of this magazine.
Additionally for 2020, the maximum amount of any rent reduction that may be credited to a manager’s wages is also $677.75 for one manager and $1,002.56 for a couple who share the same apartment unit. But even then, no such credit can be taken if the managers have not voluntarily signed a written agreement providing for that credit.
Managers who are terminated by their employers sometimes file litigation to redress claims of excessive charges of rent, underpayment of wages, overtime worked, and failure of the employer to provide rest and meal periods. That is bad for the employer, but much worse are managers who file such lawsuits against the owner or management company while still employed as the managers. Employers who are sued by existing managers cannot then fire them without running the substantial risk of being additionally sued for wrongful termination.
To diminish the likelihood of a wage, hour and rent lawsuit being filed by a manager against the employing owner or management company, here is what I recommend to AOA members:
- Have each manager sign a properly drafted written employment contract at the time of the hiring. Preprinted form agreements are probably better than nothing, but they are often woefully inadequate and likely not consistent with all the 2020 laws. It is best to have the employment contract drafted by a seasoned attorney practicing in the field of resident manager law.
- If you already have an employment agreement, review it for consistency with 2020 laws. Update it as necessary or have an entirely new one drafted by counsel and signed by the parties.
- If both the employer and manager did not sign an employment contract at the time of hiring, have one signed now.
- Require the manager to provide the employer with time records of the hours worked. I particularly favor having the manager also certify on a monthly basis the total number of hours he or she worked during the preceding month. That may lessen the employer’s exposure if the manager later files suit. Bear in mind that the statute of limitations allows the manager to sue for unpaid wages arising over the past three to four years, depending on the nature of the claims. Finally, retain the time records for at least four years after the employment relationship with the manager is terminated.
Dale Alberstone is a prominent real estate attorney who has specialized in real property and resident manager law for the past 40+ years. He also serves as a mediator of real estate disputes and is a former arbitrator for the American Arbitration Association.
Mr. Alberstone has been awarded a 5-Star AV rating from Martindale-Hubbell. That is the highest possible rating and reflects an attorney who has reached the heights of professional excellence and is recognized for the highest levels of skill and integrity.
The foregoing article was authored July 2020. It is intended as a general overview of California law only and may not apply to the reader’s particular case. Readers are cautioned to consult a lawyer of their own selection with respect to any particular situation.
Questions of a general nature are warmly invited. Address correspondence to Dale S. Alberstone, Esq., ALBERSTONE & ALBERSTONE, 269 S. Beverly Drive, Suite 1670; Beverly Hills, California 90212, or phone: (310) 277-7300.