Although “On-Call," No Pay For Resident Apartment Managers?

One common misconception it seems a great deal of Californians share is that if you are paid a salary you are not entitled to overtime. This is simply FALSE! The fact that you are paid a salary does not determine whether or not you are entitled to overtime. The fact that your employer states you are not entitled to overtime does not determine whether or not you are.

ONLY your duties and responsibilities are determinative whether you are "exempt" from the overtime laws (not entitled to OT), or "non-exempt" (entitled to OT) as defined by California law. These classifications are complex and many employers either do not understand them, or simply ignore them.

You may ask why would an employer ignore the overtime laws. An analogy I’ve heard highlights a possible explanation. Let’s say that the fine for not putting change in the parking meter was only the change that you should have deposited, as opposed to the $40.00 ticket that I recently received. There would basically be no penalty; if you got caught, you’d only be responsible for the change you owed anyway. There would be no risk.

At any rate, in the last year we’ve noticed that many apartment managers and other resident managers are coming to us for assistance and are finding that they are entitled to overtime pay despite the fact that their employer told them repeatedly that they were not entitled to overtime!

Once we get involved and contact the employer’s attorneys, we find that the defense attorney quickly concedes the employee would be entitled to overtime had they worked more than eight hours in a day or over forty hours in a week. The issue becomes just how much is owed. The defense attorney goes on the attack by questioning the amount of hours the client has claimed.

The script is the same, "David, your client worked out of his home, he could watch tv, talk on the phone, surf the net; he wasn’t working any overtime." This usually infuriates our clients, first because the employer’s attorney is attacking the person’s integrity, but secondly, my client always states again to me that "I was forced to be there during those hours."

These cases are all fact intensive and it comes down to what you can prove. Previously, the instructive case law on the issue dealt with a motel clerk required to be on-call. (See, Brewer v. Patel (1993) 20 Cal.App.4th 1017.) However, last month, a case came down from the California Court of Appeal, Second District, Division 8 which directly relates to resident apartment managers.

In Isner v. Falkenberg/Gilliam & Associates, Inc. (2008) 160 Cal.App.4th 1393, the plaintiffs were a husband and wife who worked for the defendant as resident managers. In their employment agreements the following "on-call" clause stated:

"Employee shall be on call and shall respond to the facility's emergency alarm systems on designated evenings from 5:00 p.m. until 8:00 a.m. and on designated weekends from 5:00 p.m. Friday evening until 8:00 a.m. Monday morning. While on call, Employee shall remain on the facility premises within hearing distance of the emergency alarm systems and telephone but is otherwise free to use on-call time as he or she chooses. At Employee's discretion, he or she may request that [another resident employee] (whichever is on call at the time) respond to emergency calls with the Employee, or in the place of the Employee. All time spent in responding to emergencies shall be counted as hours worked, but no other on-call hours shall be counted as hours worked, except that, if Employee is unable to have five hours of uninterrupted sleep as a result of responding to an emergency, the Employer will credit Employee with eight hours' time worked under the terms of Section V(C.) below...."
(Isner, supra, 160 Cal.App.4th at 1395-1396.)

The facts of the case were that the Isners were able to make personal telephone calls, use the internet, read for leisure, watch television and even sleep while they were on-call. (Id.) However, they were not permitted to be out of the audible range of the telephone and alarm, which precluded them from going to the movies, from going shopping, going to the pool, or even walking around the complex. (Id.) The bottom line is they could not leave the apartment while on-call. (Id.)

The defendants argued that it was only required to pay the Isners for the hours they were actually performing duties during their on-call time, which they did, and not for the remaining time that they were required to be on the premises. (Id. at 1398.) The trial court agreed and the Isners filed an appeal. (Id.)

Wage Order No. 5 is the applicable wage order governing the Isner’s occupation. It defines "hours worked" as "the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so, and in the case of an employee who is required to reside on the employment premises, that time spent carrying out assigned duties shall be counted as hours worked. ..." (You can find this Wage Order on California’s Department of Industrial Relation’s website at http://www.dir.ca.gov/IWC/IWCArticle5.pdf .)

However, the California Division of Labor Standards Enforcement (hereinafter the "DLSE") is a state agency responsible for enforcing California’s wage order regulations and on December 28, 1998, the DLSE issued an opinion letter regarding "Compensability of Resident Apartment Managers’ ‘On-Call Time’." The letter stated "...Wage Order 5, which governs employers that own or manage apartment buildings, provides a special definition of ‘hours worked’ for ‘employees required to reside on the employment premises.’ " (DSLE Opn. Letter, p. 1.) It continued, "....apartment managers who are required to reside on the employment premises need not be compensated for time during which they are free to engage in personal activities, regardless of any geographic restrictions imposed by the employer on such activities." (DSLE Opn. Letter, p. 3.) (Isner, supra, 160 Cal.App.4th at 1401.) (You can find this Opinion Letter by visiting http://www.dir.ca.gov/dlse/opinions/1998-12-28.pdf .)

Because the Isners were paid for all the time they reported responding to emergencies and other work related duties while on-call, the appellate court affirmed the Isners were not entitled to additional wages for the time they were required to be in their apartment, but not working. (Isner, supra, 160 Cal.App.4th at 1401.)

Unfortunately for the employee in this unique employment setting, the law is clear that if you are a resident manager required to live on the premises that you are not entitled to pay while you are merely "on-call" and not performing any other services for your employer.

What can you do if you’re in this situation?

Accurately record and submit all the hours you are working and what you are doing. The benefit is two-fold: first your hours will be questioned and this is will be considered evidence (the strength of which is subject to your credibility), secondly, you are less likely to feel slighted if you accurately reported your time and you were compensated for that time.

If you have any questions about this issue or any employment law related question, please feel free to email me at DTibor@LawTC.com or call me at 213-623-3338 if you would like a free consultation.