Employment Law Update

This employment law update is directed at our hospitality clients that have resident managers. We have become aware that there are several California employee-side attorneys that are soliciting resident managers by direct mailing marketing materials to hospitality properties. Their purpose is recruiting new plaintiffs for lawsuits against hotel operators for violation of wage and hour laws. It is important that you protect your business from these lawsuits, which even for minor Labor Code violations, can result in large judgments of back-owed wages, civil penalties, and attorney’s fees. The following are some general tips to help ensure your employment relationships with your resident managers are within the law:

To be exempt from many wage and hour laws resident managers must actually perform high-level management functions (i.e., hiring/firing, regularly directing the work of 2+ employees, etc.) and receive a salary that is the equivalent of at least double minimum wage, $54,080-$58,240, depending on the number of people you employ.

  • If you have a couple or a family managing your property, you have to treat each person doing work for you as an individual employee with an individual paycheck/paystub.

  • Non-exempt resident managers must make at least minimum wage for all hours worked. The value of meals and lodging provided by an employer may be credited toward minimum wage, but there are limits to the amount of that credit based on how many people you employ and what type of meals and lodging are provided.

  • Non-exempt resident managers must be paid for all hours worked. An hour worked is time spent carrying out assigned duties. Whether a resident manager’s time is an hour worked can become ambiguous when a resident manager is required to respond to guest concerns 24/7. To protect yourself, make sure you keep accurate records of all hours that non-exempt resident managers work the same way you would other employees. If employers fail to keep accurate records, courts can take the manager’s word for how many hours they worked even if they also do not have accurate records.

  • Consider implementing a written on-call policy where during specified periods the business is less busy, like nights, non-exempt resident managers are paid an on-call (lesser) rate to make themselves available to address guest concerns if they arise, but otherwise, they are not working. The time spent actually addressing guest concerns during on-call shifts is compensated at regular rates, but if there are no issues during an on-call shift it can save you money while also providing a clear separation concerning when a manager is on-duty versus on-call.

  • Non-exempt resident managers must be relieved of all duties to take required meal and rest breaks. Meal periods may only be on-duty if there is a written agreement and the nature of their work does not allow for their being relieved of all duty. This exception is narrow and duty-free meal periods are almost always required unless there are no other employees on the property.

The above are select tips and not an exhaustive list of employment practices you need to follow. If you have concerns that you have not strictly followed wage and hour laws with respect to your resident manager, contact DPA Attorneys at Law, A.P.C. and we can help you audit your practices and minimize any potential liability.