RESIDENT APARTMENT MANAGERS AND THE NEW LEGISLATION REGARDING “SICK LEAVE”

Many readers of The Joe Cobert Report have already heard or read something about the recent California legislation relating to “sick leave”. That legislation, entitled the “Healthy Workplaces, Healthy Families Act of 2014” (the “Act”), applies to virtually all full-time and part-time employees who work on at least 30 separate days in an employment year and entitles them to one hour of paid “sick leave” for every 30 hours worked.

If you are not yet knowledgeable about all the details of that legislation particularly all the records to be kept and rules to be adhered to, we recommend that you contact one or more of the numerous top-level labor lawyers and/or human resources people in Southern California. They are devoting considerable time these days explaining how the Act impacts various businesses and how labor practices and policy manuals need to be revised in order to comply when July 1 rolls around. Why are we writing about the Act in this newsletter? Because we believe that a certain group of our readers are involved in the apartment sector and need to consider specifically the Act’s effect on employment of resident (that is, on site) managers. If you are involved in this property sector — as an investor, a property owner or an officer or principal of a property management company — you need to read on.    The Act Applies Here To begin with, there is no doubt that all or nearly all on-site managers are employees subject to the protections of the new Act. However, a number of the duties and procedures pertaining to on-site managers of multi-family properties and situations they encounter in performing their work differ from those in many other fields of employment. In particular, resident managers have job functions requiring them to divide their home life and personal time and, unlike others who choose to work at home for convenience, they must be at the premises at various times as part of their jobs. Some Key Issues and Questions To Be Addressed Consider these six items:

  1. When the employee is a resident manager who works largely from home and tells the employer that he or she needs some time to care for a sick parent or child living with the employee, how does one clearly distinguish which hours are “on the clock” and counted toward computation of sick leave and which hours are merely “personal” time? What documentation will be sufficient to address this concern?
  2. What if there are two cohabitants (spouses or otherwise) in an apartment unit who essentially share the on-site management tasks, how do you allocate the hours of employment so as to calculate the entitlement of each to sick leave?
  3. Sick leave payment under the Act is to be paid at the employee’s hourly rate when the leave is taken. For those resident managers who receive total or partial compensation by credit against rent due, will that impact the calculation of hours for which the employee accrues “sick leave”?
  4. Many resident managers are “on call” in the event of emergencies. If the owners continue to have an “on call” policy, will the hours counted for sick leave computation include any of the “on call” time? Will the clock start running at the moment the emergency call comes in or prior thereto when the manager is “available” in case of such a call?
  5. The Act provides that an employee choosing to utilize “sick leave” does not have to pre-arrange the time with the employer (although it is preferred if the employee can provide notice early on). Nor does the employee have to line up a replacement in the event that he or she is going to utilize accrued sick leave. What should owners and property management companies acting on behalf of owners do to be prepared in the event the resident manager takes sick leave with little or no notice? If there is no co-manager, what latitude does the employer possess to cover for the absent manager? Would the situation be different for smaller apartment buildings than for complexes of 16 units or more (as to which California law mandates a resident manager)?
  6. The Act requires the posting of certain notices about the sick leave rules at a “conspicuous place” on the property where the employee works. If there is no separate room on the premises which has been set aside as an office specifically for use by the resident manager of an apartment project, what locations qualify as “conspicuous places” for these purposes? What enforcement is there going to be on this and are there going to be penalties for supposed non-compliance?

Special Suggestions For Apartment House Buyers

As part of their due diligence, investors seeking to buy apartment buildings with on-site management need to verify how much paid sick leave the on-site manager has earned but not used. Pro formas generated by syndicators now will have to take this accrued liability into consideration. Sellers of such complexes now must include this information on their books (as well as in every payroll stub given to the on-site manager with his or her salary check).

Additionally, think about this: Many apartment house buyers want to select their own on-site manager instead of the person the seller was using. Now, in doing this a buyer must inquire when the current manager last took sick leave. Why? Because the Act creates a rebuttable presumption that termination of an on-site manager within 30 days of that manager’s taking sick leave is retaliatory for the taking of such sick leave and therefore constitutes a wrongful termination.

  What Next On This Topic?

In preparation for the July 1 operative date of the Act, lawyers, HR personnel for various affected businesses and apartment associations around the state are scrambling to develop the forms and modify the language of standard employment agreements they have long been using or disseminating to their members or clients.

Joe Cobert has been working on this quite actively. If there are any amendments to the Act or regulations generated by the office of the California Labor Commissioner, Joe intends to obtain copies of same and to keep our readers updated.

We express our thanks to labor lawyer Richard Rosenberg of Ballard Rosenberg Golper & Savitt, LLP for his assistance with this article.

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