California Resident Managers’ Workplace Rights

Live-in resident managers face a unique challenge: their bosses are often also their landlords.

California law requires an individual to live on the premises if a building has sixteen (16) or more units. Cal. Code Regs. tit. 25, § 42. These individuals are often referred to as resident managers. Resident managers carry out various job duties, including but not limited to, collecting rent, assisting tenants, facilitating repairs, and attending to emergencies in the building.

This makes resident managers especially vulnerable to workplace violations such as wage theft and retaliation. In most instances, when resident managers are fired, their landlord can evict them immediately.

This is because housing protections that apply to tenants do not usually apply to resident managers, who are often considered to be “licensees”.

Employers therefore often use the threat of losing one’s housing to keep resident managers from complaining about mistreatment at work. However, the law protects resident managers from this sort of retaliation.

Resident managers should be aware of the rights they have to be (1) paid correctly; and (2) protected from retaliation if they complain that they are not.

Resident Managers Should Keep Track Of All Hours Worked.

In the case of resident managers who are required to reside on the employment premises, “hours worked” means “that time spent carrying out assigned duties shall be counted as hours worked”.

Wage Order 5 § (2)(k). For resident managers, “hours worked” does not include on-call time, but only “time spent carrying out assigned duties” for resident managers. Isner v. Falkerberg, 160 Cal. App. 4th 1393, 1399 (2008).

Although resident managers generally bear the burden of proving the hours they work, the burden shifts when the employer has failed to keep accurate records.  Under California law, where the employer has failed to keep statutorily mandated time records, the burden then shifts to the employee for a best faith estimate of the hours they worked. Hernandez v. Mendoza, 199 Cal. App. 3d 721, 727 (1988).

Resident managers should keep track of all time they spend working, even if their employer does not require them to complete time records.

Employers Must Pay Resident Managers For All Hours Worked.

A resident manager must be paid at least the minimum wage for all hours worked. See Lab. Code  § 1197; Wage Order 5 § 4. Resident managers may not enter into an agreement to work for less than the minimum wage.  Lab. Code § 1194(a).

Unique Wage And Hour Laws Apply To Live-In Resident Managers In California.

There are two common ways employers pay resident managers: (1) using the value of the resident manager’s rent to pay their wages (also called a “rent credit”); or (2) offering the resident manager reduced rent. In each case, the employer must always provide the resident manager a paystub.

However, employers often do not follow the law to pay resident managers correctly.

When an Employer Can Use the Value of Rent to Pay a Resident Manager’s Wages (Also Known as a “Rent Credit” or “Lodging Credit”).

An employer may only use the value of rent to pay a resident manager’s wages if:

  • The resident manager does not pay any rent; and
  • There is a voluntary written agreement between the employer and the resident manager regarding the rent credit; and
  • The living accommodations are available to the employee for full-time occupancy, must be adequate, decent, and sanitary according to usual and customary standards and the resident manager shall not be required to share a bed; and
  • The rent credit used to pay a resident manager’s earned wages is not more than the following (which changes every year):

Wage Order 5 § 10(C).

For example, a resident manager who works 40 regular hours in a week in San Francisco is entitled to be paid at least the minimum wage (currently $15.59 per hour) for the work performed. Therefore, in this example, the resident manager must be paid a total of $623.60 for that week (40 hours x $15.59).

However, if the resident manager is provided with a room that is occupied alone, the employer may only credit a maximum of $61.13 in rental value to the resident manager’s wages. Therefore, the employer must still pay the resident manager $562.47 in wages for their work ($623.60 – $61.13).

Legal Requirements in Order to Charge a Resident Manager Rent

Employers may charge a resident manager rent if:

  • There is a voluntary written agreement between the employer and the resident manager regarding the amount of rent; and
  • The rent does not exceed 2/3 of the fair market rental value of the apartment; and
  • The employer does not use any value of rent to pay a resident manager’s wages.

See Lab. Code § 1182.8.

For example, if an employer charges a resident manager 2/3 of the fair market rental value, then the employer must pay the resident manager all of their wages, in full, in a separate paycheck. That means the employer cannot apply any “rent credit” to pay the resident manager’s wages, as discussed above.

  • Moreover, in the event there is no written agreement, and as a condition of employment, the resident manager must live at the place of employment or occupy quarters owned or under the control of the employer, then the employer may not charge a resident manager rent in excess of the values listed in the lodging table above.

See Wage Order 5 § 10(E).

Employers May Not Retaliate Against Resident Managers Who Speak Out About Their Legal Rights

The law protects resident managers from retaliation if they complain that they are owed wages or about other workplace violations. See Lab. Code §§ 98.6, 1102.5(b). Employers are liable for penalties of $10,000 per employee per violation, and other damages, for retaliatory conduct.

If you have been subject to wage theft or retaliation in the workplace, please feel free to call the experienced workers rights attorneys at Hunter Pyle Law, and to make use of our free and confidential initial intake process.  We can be reached at (510) 444-4400, or at inquire@hunterpylelaw.com.