Category Archives: News

Top Five Ingredients of a Good Resident Apartment Manager Wage Claim

We have seen a drastic increase in resident apartment manager wage claims in recent months. These cases usually involve an employer (an apartment owner, apartment management company, or both) who gives free rent to an apartment manager in exchange for labor. The problem is that California law strictly regulates how much the employer may charge for rent, and how much of a “rent credit” the employer can give the apartment manager. If the employer makes a mistake, the result is an apartment manager who can be owed unpaid wages and penalties. If you are a resident apartment manager and think you may have a case for unpaid wages, look at these top five criteria for a good resident apartment manager wage claim:

1. The lack of a contract authorizing the exchange of work for free or reduced rent.

The lack of a contract authorizing an exchange of rent for labor is the single biggest indicator of a good apartment resident manager wage claim. In order for an employer to give a rent credit to a resident apartment manager, the employer and the resident manager should have a written agreement stating that the employer will provide free or reduced rent in exchange for labor. If there is no such contract or agreement, any rent credit given by the employer is likely invalid. What this means is that, even though the employer may have been giving free or reduced rent to the resident apartment manager, the resident manager can likely go after the employer for the full amount of any unpaid hours that he or she may have worked, plus additional penalties, interest, and attorney’s fees. If you do not have a contract with your landlord or apartment owner or apartment management company, and yet you get free or reduced rent in exchange for your labor as a resident apartment manager, you may have a great claim for unpaid wages.

2.  The existence of accurate time records.

You may remember having worked many hours as an apartment manager, but unless you have some records showing how many hours you worked, you may have a tough time proving your case. The best records that we see are those kept contemporaneously by managers. Records made up weeks, months, even years after the work was performed are not as valuable as records kept on the day that the work was done. The very best records record work by the minute. If your employer does not keep records, it is likely a great idea to do so on your own. The US Department of Labor even has an iPhone app that can be used for this very purpose.

3.  The size of the apartment complex that you manage.

If you don’t have time records, you will have to use circumstantial evidence to prove your hours. In that event, bigger may be better for resident apartment manager wage claims. The bigger the complex that you manage, the more work you likely have to do. These cases are all about how many hours you worked, and it is a good bet that you would work more as an apartment manager in a complex of 50 units than you would in a complex of 15 units. That is not to say that managers of smaller complexes do not have a case; it just means that the larger the complex you manage, the more likely you worked longer hours managing that complex.

4.  Clear and organized employment records.

We see it every day: an employee may have a great wage claim, but his or her records are in tatters, with pages missing and handwriting all over them. If you plan on filing a wage claim, get your information organized — and do not write on it, because it’s evidence!  So keep your employee handbook, lease, payroll records, receipts, and other evidence of work performed or expenses incurred organized and easily accessible.

5. Work performed up until the recent past.

A wage claimant can go back as many as four years for unpaid wages in California. But the measurement goes backward from the date you file your claim or lawsuit. So, for example, if you file your lawsuit today (and it has the correct legal allegations), you can try to recover wages going back four years from today. So if your last day of work was yesterday, you can recover your unpaid wages for almost the entire four-year period. But if your last day of work was two years ago, you’ll only be able to go after unpaid wages for two years. So if you have a claim for unpaid wages, don’t sit on your claim!

If your wage claim has any of these five ingredients, your odds of a good outcome are likely better. Contact Strauss & Strauss now for a free case evaluation and see if you really do have a good wage claim.

Learn more about resident apartment manager wage claims here.

Court of Appeal Upholds $1.2 million Fee Award

The First District Court of Appeal for the State of California has affirmed a decision of the Alameda County Superior Court to award attorney’s fees of approximately $1,162,000 to Strauss & Strauss, APC and co-counsel the Hathaway law firm of Ventura.

The case, Britto v. Zep Inc., began as a putative class action brought by Plaintiffs Keith Britto and Justin Cowan on behalf of themselves and other salespersons of Zep Inc. in California.  Plaintiffs sought reimbursement for job-related business expenses (such as mileage) and deductions from their wages.  Plaintiffs also sought civil penalties under the Private Attorneys General Act of 2004 (“PAGA”) for Zep’s violations of the California Labor Code.

After the trial court denied the plaintiffs’ motion for class certification, over fifty putative class members attempted to intervene in the Britto action.  Ultimately, the intervenors had to file their case separately, and Zep removed it to the United States District Court for the Northern District of California.  Zep also compelled eight of the intervenors into arbitration.  (Each of those cases ultimately resolved, with the plaintiffs prevailing in each of the eight arbitrations.)

Back in state court, the Britto case resolved after Zep unsuccessfully brought a motion for summary judgment. Zep made an offer of compromise pursuant to Code of Civil Procedure section 998, which offered to pay (2) Plaintiffs Britto and Cowan a certain amount each for their individual claims, (2) the State of California (Labor and Workforce Development Agency) penalties under PAGA in the amount of $275,000, and (3) Plaintiffs’ attorney’s fees and costs.

On motion by Plaintiffs for their attorney’s fees and costs, the Alameda County Superior Court awarded fees of approximately $1.16 million, which included a fee multiplier of 1.25.

Zep appealed the award of attorney’s fees on the basis that the trial court awarded too much. The Court of Appeal disagreed, holding that the trial court has broad discretion to award fees and that the record supported the trial court’s decision to come up with an appropriate fee award.

The appellate decision is below:

Ecolab Route Sales Managers Held to be Non-Exempt from Overtime and Meal Periods

On September 28, 2015, the United States District Court for the Northern District of California, in the case of Ross v. Ecolab Inc., held that Ecolab has violated California law by not paying overtime to the Route Sales Managers and Route Managers in its Institutional Division. The case, originally filed in December 2009 as Icard v. Ecolab, Inc., San Francisco County Superior Court case number CGC-09-495344. The case seeks unpaid overtime for Route Managers and/or Route Sales Managers who have worked in California, do not cross state lines in the performance of their duties, and have not received full and correct pay for all hours worked and have not received accurate paycheck stubs. Ecolab removed the case to the Northern District of California, where it has the case number 13-cv-5097-PJH.

In a 27-page decision, the Northern District of California held that Ecolab’s three California overtime exemptions (the outside salesperson exemption, the commissioned salesperson exemption, and the hazardous materials exemption) do not apply as a matter of law. The court further held that the case may continue as a class action.

The ruling constitutes a major victory for the California-based Route Managers and Route Sales Managers. Due to the fact that Ecolab’s overtime exemptions have been held not to apply, Ecolab must pay these individuals overtime, perhaps even so far back as December 2005. Ecolab may also be subject to various penalties sought by the plaintiffs in the Ross case, including but not limited to penalties for the willful failure to pay wages at termination or resignation and the failure to provide accurate paycheck stubs, as well as penalties for various California Labor Code provisions under the Private Attorneys General Act of 2005, Lab. Code § 2698 et seq.

Trial has not yet been set in this action. Strauss & Strauss provides updates about the case here. Please contact Strauss & Strauss with any questions.

The court’s decision is below.

Rent Credits for Resident Apartment Manager Wage Claims

Strauss & Strauss has a long history of representing California employees in resident apartment manager wage claims. This article is an update on this aspect of California law.

California law is very peculiar and confusing when it comes to the payment of wages to resident managers. Apartment owners and/or management companies (sometimes the owner is the manager and sometimes the apartment management company is a separate entity, but most of the time both can be liable for unpaid wages) can only credit a certain amount of “free” rent against any obligation to pay the minimum wage.

Have we confused you already?

Let’s start with the basics.

1) All hours worked by employees in California have to be paid at a rate of no less than the current minimum wage. There are only a few exceptions to this rule, and an apartment manager who receives free rent is probably not going to meet one of the exceptions. So every hour the apartment manager works must be paid at the minimum wage rate. The employee may bring a resident apartment manager wage claim to recover those minimum wages.

2) But an employer can use “free” or reduced rent as an offset (or “rent credit”) against any minimum wages it may owe a resident manager for work performed. The state of California sets a maximum amount of what the rent credit can be.

Currently, as of September 2015, the maximum rent credit is as follows:

  • For a single resident manager who occupies a single apartment: 2/3 of the ordinary rental value of the apartment or $508.38 per month, whichever is lower; and
  • For a couple both employed as resident managers who occupy a single apartment: 2/3 of the ordinary rental value of the apartment or $752.02 per month, whichever is lower.

On January 1, 2016, the maximum rent credit will increase as follows:

  • For a single resident manager who occupies a single apartment: 2/3 of the ordinary rental value of the apartment or $564.81 per month, whichever is lower; and
  • For a couple both employed as resident managers who occupy a single apartment: 2/3 of the ordinary rental value of the apartment or $835.49 per month, whichever is lower.

3) The employer can only use rent credit under certain circumstances.  The federal court case of Brock v. CarrionLtd. (2004) 332 F.Supp.2d 1320 held that in order to validly pay the resident apartment manager by offering free or reduced rent, there must be a voluntary written agreement between the employer and the resident manager, and that agreement must meet all of the following conditions: (1)The agreement must be in writing; (2) The agreement must specifically state how much money is to be credited against rent; (3) The agreement cannot credit more than the allowable amounts set forth above; and (4) The agreement must specifically say the credit is “being applied toward minimum wage. Failure to follow any steps will void the agreement.  (Id. at 1321.)  A later California case, Von Nothdurft v. Steck (2014) 227 Cal.App.4th 524 (2014) held that “all that is required” for the employer to be able to apply a rent credit “is that the employer and employee voluntarily agree to credit lodging against the employee’s wages.”  Hence, reading these cases together suggests that there needs to be a voluntary written agreement between the employer and the resident manager that states that the employer will credit lodging against the employee’s wages.

In other words, if there is no written agreement that provides that the employer will use a rent credit to cover some of the wages it would otherwise have to pay the employee, then the employer cannot use the rent credit.

4) If the employer cannot use the rent credit (because there is no written agreement, for example), the employer must pay the minimum wage for all of the hours worked by the resident apartment manager.  IF YOU DO NOT HAVE A WRITTEN AGREEMENT TO CREDIT LODGING AGAINST WAGES, THEN CONTACT US IMMEDIATELY, AS YOU MAY BE OWED BACK WAGES AND PENALTIES IN A RESIDENT APARTMENT MANAGER WAGE CLAIM.

For more information about resident managers and rent credits and resident apartment manager wage claims, read these additional articles we have posted on our website:

And feel free to contact Michael A. Strauss or Andrew C. Ellison with your questions about resident apartment manager wage claims.

Trucker Owner-Operator Misclassification Awards Piling Up

Palay Law Firm has long been representing the interests of California-based truckers in disputes with their employers.  The last few years have seen an increasing number of trucking companies reclassifying their employees as independent contracts.  Known as “owner-operators,” these individuals are for all intents and purposes employees.  For the most part, the intentional classification of drivers as independent owner-operators is a scam that is only meant to line the pockets of the trucking companies.  The drivers are still common-law employees, regardless of whether their employers make them sign independent contractor agreements.  The companies exert control over almost every aspect of the relationship, from the drivers’ hours worked to who can perform work on their trucks to where they can buy fuel to what logos must be on their trucks and uniforms.

Why does this matter?  Most labor laws in California do not apply to independent contractors.  That makes sense.  If Company A, which sells T-shirts, hires Company B, a marketing company, to design a website, the relationship between Company A and Company B would most likely be independent.  Company B can hire its own employees — as many as it needs to get the job done — and supervises them too.   In this independent contractor relationship, Company B has control over its employees, and it must comply with California labor laws.  Company A simply pays for Company B’s services and Company B produces a website for Company A.

In this example, Company B is a separate legal entity with its own employees, and it provides a service — web design — that is independent from Company A’s business — making T-shirts.  Company A has its own employees too.  The relationship is clearly independent.

But what if Company A were to take one of its own clothing designers and reclassify her as an independent contractor?  There are circumstances in which that would work.  Say, if the clothing designer used her own equipment, worked outside of Company A’s offices, could design clothes for other T-shirt companies, and had her own business, it is very likely that she could lawfully be classified as an independent contractor.

But what if the newly reclassified independent contractor still worked in Company A’s office, using Company A’s equipment, could only design clothes for Company A, and did not have her own business?  The chances are that she would be found to be an employee, regardless of the “independent contractor” title given to her.

As an employee, rather than an independent contractor, the clothing designer for Company A would have significant rights.  Company A would have to follow California labor laws, including paying overtime, if applicable, withhold employment taxes from her paychecks, and pay payroll taxes.  If the clothing designer were to leave Company A, she could receive unemployment (assuming that she was otherwise eligible), and, while employed, she could receive workers’ compensation benefits (again, if otherwise eligible).

By classifying an employee as an independent contractor, therefore, an employer can skirt these fundamental California labor laws and avoid paying significant amounts of payroll taxes.

Back to our trucker cases.  These owner-operators, who drive trucks with their company’s logo on them and cannot haul for any other company, are more than likely employees.  The companies they work for are avoiding California labor laws and not paying payroll taxes.  Employees and the taxing authorities alike are up in arms.  The recent strike at the Port of Los Angeles is evidence of the drivers’ dissatisfaction.

But the drivers are not without recourse.  Over the past few years, Palay Law Firm has been able to recover hundreds of thousands of dollars for misclassified owner-operators.  Their claims are typically for wrongful deductions from wages.  Their employers pay them on a per-mile or per-job basis, then deduct their pay for line items like insurance, fuel, maintenance, tolls, etc.  If the owner-operators were truly independent contractors, these deductions might be legal.  But since the owner-operators are truly employees, and California employers cannot make deductions from wages for typical business expenses, these owner operators can seek full reimbursement for these deducted expenses in a claim against their trucking company.

See the factors that courts and the Labor Commissioner use to determine whether a truck driver has been misclassified as an independent contractor.

Below are recent Labor Commissioner decisions that were rendered in favor of our clients in owner-operator misclassificaiton cases (the amount in parentheses is how much the Labor Commissioner awarded and the location is where the hearing took place).

In these cases, the amount awarded was nearly 100% of the amount claimed by our clients.

If you have been classified as an owner-operator, or it has happened to someone you care about, do not hesitate to contact Palay Law Firm at (805) 641-6600 or contact us through our online intake form.  We represent owner-operators throughout the state.  They just need to be based in California.


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