Page 57 - aagla4-2021
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 Property Management
Continued from page 54
MANY HOURS over the last several years, and no one had accounted for their hours worked and paid them for that time. These characters then suddenly reappear and come back to property owners through their attorney to pursue backpay, overtime, penalties, interest, etc. and they often win if the property owner has failed to keep accurate records. Imagine out of the “blue” being hit with a claim for multiple years of backpay and penalties? The average amount of these types of settlements is about $60,000. Make sure you are doing what you can to avoid this type of legal exposure.
I get it...I know what you are thinking in your head right now – “But, I am just giving them a rent credit.” Yes, a rent credit that is credited towards their wages for the hours that they have worked. You must at a minimum, collect a timesheet monthly to make sure they are not going over their hours which in my calculations should be no more than 10 to 12 hours per week before going over the maximum credit amount which is currently permitted under California state law. The maximum allowable reduction in rent that can be credited toward the minimum wages owed is $734.21 per month for a single manager and $1,086.07 per month where a couple is employed and when the employer has fewer than 26 employees. As of January 1, 2022, minimum wage will increase to $14.00 per hour and then $15.00 per hour as of January 1, 2023 for employers with 25 or fewer employees. Employers with 26 or more employees may charge rent up to $790.67 (single manager) and $1,169.59 (couple). As of January 1, 2022, minimum wage will increase to $15.00 per hour for employers with 26 or more employees.
Based upon California’s current minimum wage as of January 1, 2021 is $13.00 per hour for employers with less than 26 employees, and accordingly, the
$734.21 equates to about 56 hours per month. Keep in mind, minimum wage laws vary by jurisdiction. While as of January 1, 2021, the California statewide minimum wage increased to $13.00 per hour for employers with fewer than 26 employees and became $14.00 per hour for employers with 26 or more employees, there are approximately 35 cities that have higher minimum wages such as San Francisco, Oakland, Los Angeles, Berkeley, Santa Monica, Santa Clara, San Diego, Malibu, and Cupertino.
For the City of Los Angeles, specifically, I took the monthly credit toward wages and divided that amount by the current minimum wage which is $15.00. As a result, I came up with the maximum amount they can work per month: (i) approximately 52.5 hours for an individual or 77.5 hours per couple if less than 26 employees, and (ii) 56.5 hours for an individual and 83.5 hours per couple if 26 or more employees.
Any amount of time your onsite employees work over these maximum hours, even a mere 15 minutes over, must be paid in wages Note: (do not pay them in cash - use a payroll company). If you do not pay your onsite personnel for additional time worked every month, then you could be in a position for a wage claim later on down the road. If your onsite employee were to come to you and state that you owe them five years of overtime, do you have timesheet records to disprove that type of claim to a judge? If not, you are at risk of exposure to unpaid wage claims. As a rental property owner (or any type of business owner for that matter), if this risk of exposure amounting to thousands of dollars in potential wage claims fails to motivate you to closely follow this law and maintain adequate records, I am at a loss as to how to convince you.
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