LA On-Site Property Manager Compensation 2016 | Real Property Management Choice

Without a doubt one of the most confusing aspects of residential management is what the requirements are for an on site or resident manager. In California, if there are 16 units or more a designated ‘responsible person’ is required to live on site. As the number of units increase so does the staffing requirements. The compensation for this position is governed by State and Federal rules and regulations.

First of all, the resident manager is an employee and generally cannot be an independent contractor. They are therefore entitled to the prevailing minimum wage of $10.00 per hour, with some municipalities having an even higher minimum. If an owner wishes to trade off an apartment rent value, the minimum wage value cannot exceed $564.81 or approximately 13 hours per week times the prevailing minimum wage. Two managers living in the same unit cannot exceed $835.49 or approximately 19.5 hours per week times the prevailing minimum wage. In any case the credit amount may not exceed two thirds of the market rent value. Therefore, if a unit is valued at $1,200 per month the owner can only charge a resident manager two thirds of that or $800. The owner may then only credit for a single manager up to $564.81 towards minimum wage leaving the manager to pay $235.19 and working 13 hours per week. Any additional hours must be paid as a normal payroll would be.

**The offset to rents can only be done by a written contract. The hours and restriction to hours is critical to this agreement. Many owners have lost wage claim lawsuits brought by resident managers. Therefore it is critical to have a written agreement, not to exceed the two thirds rule, and comply with the minimum wage requirement to protect and properly manage the relationship with the resident manager. The following are options for compensating a resident manager.

Option 1

Full apartment concession; the manager does not pay rent or exchange hours for rent

Manager is paid at least minimum wage for every hour worked

Example: Manager receives a 1 bedroom apartment free of charge and works 40 hours per week at a rate of at least prevailing minimum wage ($10.00).

Option 2

Maximum lodging allowance by law of $564.81 for one person & $835.49 for two people

The number of hours a manager’s works monthly is calculated based on the lodging allowance ($564.81 for one or $835.49 for two) divided by prevailing minimum wage ($10.00).

If the manager works more than the number of hours calculated using the formula above, each additional hour must be paid at prevailing minimum wage.

Example: Manager (one person) receives a 2 bedroom apartment. The maximum lodging allowance is $564.81/$10.00 = 56.48 hours per month

The manager is only allowed to work 56.48 hours per month in exchange for the apartment. If the manager works more than 56.48 hours per month they must be compensated for those hours at minimum wage.

The unit size of the manager’s apartment does not affect the number of hours the manager is allowed to exchange.

Option 3

The Check Exchange

A manager may be charged up to 2/3rds the market rent. The manager pays their rent and receives payment for each hour they work.

Check exchange literally translates to the manager gives the property a check for rent and receives a check for their hours worked.

Example: Manager receives a 2 bedroom apartment with a market rent of $1500 per month; 2/3rds of the market rent is 999.00, which is the Manager’s monthly rental payment.

The manager works 30 hours per week and is paid at least minimum wage for each hour they work, which they receive from the owner each pay period

**Rent control buildings: There are multitude of rules and limitations concerning rental increases of apartment managers residing in rent controlled units. Please referral to http://hcidla.lacity.org/resident-managers-tenants.

Sick Leave “The Healthy Workplaces, Healthy Families Act of 2014.”

Beginning July 1, 2015, employee who works in California for 30 days or more per year will get paid sick days. Such sick days will accrue at a rate of no less than one hour for every thirty hours worked. When you have worked for 90 hours out of the year, you will have accrue three hours of paid sick leave. This entitled employee to use accrued paid sick days starting on your 91^st day of employment.

Employer is not required to provide paid sick leave to employee for unused sick days after termination, resignation, retirement or other separation from employment. However, if the separated employee is rehired by the employer within one year from the date of separation, previously accrued but unused sick days are automatically reinstated.

Sick leave are paid out at the employee’s hourly wage. Accrued but unused paid sick days carry over to the following year of employment. Employer may limits employee’s use of paid sick days to 24 hours or 3 days in each year of employment.

Quality Property Management Service at BEST value

Do you have an updated signed properly prepared legal agreement with your on-site manager?

Do you have complete clear recorded documentation of hours worked?

Did you post manager’s name, address, hours in a conspicuous place at the building?

Do you know how to avoid wage and hour violations in California when hiring on-site apartment managers