Do You Make Under $47,476? Read This.

If you make less than $47,476.00, you may be entitled to a substantial amount of unpaid overtime by your employer due to a change in California and federal employment law.   

For legal background, there are two employee classifications in California: exempt employees and non-exempt employees.

Exempt employees are not entitled to overtime for any hours worked in excess of eight hours per day or 40 hours per week, meal breaks every five hours, rest breaks every four hours, and other protections. A non-exempt employee could work 100 hours per week and not be entitled to anything but their regular salary (ie. $60,000 per year). A properly classified non-exempt employee must be paid a minimum salary of $47,476 beginning December 1, 2016, and must spend 51% of their time performing non-exempt job duties, such as supervising of other employees or perform high-level office work, like accounting or human resources.

Non-exempt employees are entitled to overtime, breaks, and many other protections. For example, a non-exempt employee would be entitled to 20 hours at 1.5 times their regularly hourly rate if they worked 60 hours per week. Statistically, most employees are non-exempt, even employees that spend some time managing other workers or who perform non-manual office work.

Employers regularly misclassify employees as “exempt” to avoid rigorous obligations to pay overtime and provide breaks. However, there is a common misperception among workers and employers that an employer simply needs to pay an employee a flat salary, rather than an hourly wage, in order to classify an employee as “exempt” from overtime. Payment of a salary rather than an hourly wage is just one of many factors in determining whether an employee is properly classified.

Moreover, beginning December 1, 2016, all exempt employees must be paid a minimum salary of $47,476 in order to be properly classified as exempt. This means that any worker paid under $47,476 must be paid overtime and be provided with rest breaks beginning December 1, 2016.

The new law means that many exempt employees will be getting a pay raise to $47,476 or more beginning December 1, 2016, or will be converted to hourly-paid employees. However, many employers may not change their policies in light of the new law.

Are you a Santa Cruz or  Monterey County salaried employee and paid less than $47,476.00? If so, call the Law Office of Brian Mathias for a free consultation.

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Five Common Mistakes for Landlords to Avoid

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Each and every landlord-tenant issue will pose a unique challenge or novel issue. However, most landlords can avoid legal problems by learning from these top five most common landlord mistakes.

1. Preparing your own 3-day, 30-day, or 60-day notices

Landlords should never draft and serve their own pre-lawsuit notices. This can be a time consuming and costly mistake.

For background, a landlord is required to serve a pre-lawsuit notice on the tenant in the event of a failure to pay rent or other breach. These are commonly referred to as a “3 Day Notice to Pay Rent or Quit” or a “30-Day Notice to Quit”. The notice must meet highly technical requirements in order to survive an unlawful detainer or eviction.

The problem is that landlords often prepare these forms incorrectly. This results in the notice having to be re-served and the landlord having wait another three days, another 30 days, or even another60 days to enforce legal rights in court. Landlords should always have an attorney prepare a pre-lawsuit notice.

2. Not asking for a security deposit

Landlords should always require a security deposit of at least one-month’s rent, or even more. Legally, a landlord may require a security deposit of up to two-months’ rent for an unfurnished property and three-months’ rent for a furnished property.

Collecting a security deposit is often a landlord’s only opportunity to collect money from the tenant in the event of a failure to pay rent. As an illustration, in the event the tenant refuses to pay rent, a lawsuit called an “unlawful detainer” must be initiated. That process, if successful, can take 30 days or longer to complete. During that entire time the tenant is typically not paying any rent.

3. Not promptly objecting to late rent payments or other contract breaches

A common problem occurs when landlords fail to promptly object to late payments of rent or other breaches of the rental contract. This is problematic for landlords because the tenant may successfully argue that the landlord “consented” to the breach.

As an illustration, take the case of Jared who rents an apartment in Capitola and his landlady, Laurel.

Jared started off as a very good tenant from Laurel’s perspective and always paid his rent on the first of each month. Then Jared gradually starts paying the rent a few days late. He never pays a late fee. Secretly Laurel is highly annoyed with Jared for paying the rent late, but she never says anything to Jared about the problem. After 8 months of receiving the rent late, Laurel is fed up and wants to evict Jared for failing to pay rent on time and failing to pay a late fee.

Unfortunately for Laurel, and luckily for Jared, Jared may argue that Laurel consented to his practice of paying rent late and paying it without a late fee. He may argue that the long-standing practice of paying rent late modified the rental contract that called for rent on the first day of the month. Jared has a viable defense to an unlawful detainer.

Landlords should always promptly object to late payments of rent or other breaches of the landlord tenant agreement.

4. Allowing “tenant swapping” and “subletting”

It’s a bad idea for landlords to permit to “tenant swapping”. Tenant swapping occurs in multiple-occupant rentals when one tenant moves out, and the remaining tenants select a new tenant to take the old tenant’s place. Tenant swapping is prevalent in student-occupied housing at UCSC and CSUMB.

“Subletting” occurs when an existing tenant rents out the rental premises for a short period time. The original tenant then becomes a quasi-landlord. Subletting is common during the summer when college students leave Santa Cruz and Monterey at the end of the school year.

Tenant swapping and subletting are problematic for two reasons. First, much of the time tenant swapping and subletting results in the new tenant not signing a written landlord-tenant agreement with the landlord. Failing to have a written landlord-tenant agreement with each tenant creates complications with the security deposit and in the event of an eviction.

Second, tenancies that result from tenant swapping and subletting typically do not go through any basic screening and application process by the landlord. A basic screening process will disclose if the potential tenant has a history of evictions and not paying rent. Would you want a career squatter living in your property? Absolutely not!

5. Using free landlord-tenant agreements

Landlords also encounter problems by using free landlord-tenant agreements and leases from the internet. While some free landlord-tenant agreements may be fine, many are not tailored for California law. Free landlord-tenant agreements may also require the landlord to utilize an expensive arbitration or mediation process in the event of a failure to pay rent. Landlords should always use a landlord-tenant agreement from a trusted source that is based on California law.

Are you a residential landlord in Santa Cruz or Monterey County? Call the Law Office of Brian Mathias for a free consultation.

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I'm Gonna Get You!! What is “Retaliation” in Employment?

Retaliation is a very misunderstood concept in employment law. Much like the terms “wrongful termination” and “harassment”, the legal definition of “retaliation” is narrower than the common definition.

As commonly understood, retaliation in employment means any form of employer-revenge as a result of the employee speaking out over any workplace issue.

Legally speaking, retaliation is only illegal if the employee engaged in “protected activity”. Not all activities are protected against retaliation. There are dozens of types of protected activities in employment law. The most common forms of protected activity are good faith complaints of unlawful discrimination based on the employee’s disability or health condition, requests for health accommodation, pregnancy, gender, race, religion, sexual orientation and other legally protected characteristics.  

As an example of un-protected activity, take the case of Julia. Julia has worked as a nurse for five years for Franciscan Hospital in Santa Cruz, California on it’s prestigious cancer treatment ward. Julia is passionate about treating patients with cancer. Unfortunately, Julia gets a new manager, Bob, who abruptly reassigns Julia to the hospital’s incredibly boring podiatry unit. Julia is miserable in the podiatry unit. She repeatedly complains to management and says that her work is “boring”, that it “doesn’t effectively use her skill set” and that “the job stinks”. Eventually, Bob gets tired of Julia’s complaints, and at the end of the year recommends that the hospital terminate Julia’s employment.

Unfortunately nurse Julia does not have a case for retaliation against the hospital. Did Bob the supervisor act morally and ethically in taking away her beloved job on the cancer ward? Probably not. Did Bob most efficiently apply Julia’s skill set at work? Nope. Was it vengeful, mean, and immature for Bob fire Julia after she complained? Absolutely. However, Julia still does not have a case for retaliation because she did not engage in protected activity.

As an example of activity that is protected against retaliation, let’s change the facts and imagine that nurse Julia suffers from diabetes. Nurse Julia has to take daily ten-minute breaks during work to take insulin and test her blood sugar to manage her diabetes. She must also regularly take time during the workweek to attend doctor appointments. Unfortunately, Julia’s new manager, Bob cannot stand Julia’s time away from work and issues her a poor performance review. Bob specifically gives Julia a one-star ranking in the categories of “attendance” and “teamwork” and writes “Julia should manage her health condition on her own personal time, not at work.”

After receiving the poor performance review, Julia submits a written complaint to Bob and the hospital’s CEO about Bob’s comments and states, “I’m being discriminated against because of my diabetes…” and “I will need periodic breaks from work to manage my diabetes.” After receiving the complaint, the hospital CEO fires Julia because he does not want a “complainer” working for him.

Julia has a great case for unlawful retaliation. Julia engaged in protected activity by complaining about Bob’s discriminatory conduct and by requesting a reasonable accommodation to manage her health condition. Julia would be entitled to reinstatement, economic, and emotional distress damages under California’s Fair Employment and Housing Act.

Are you an Aptos, Santa Cruz, Watsonville, or Monterey County employee experiencing retaliation at work? Call the Law Office of Brian Mathias before you are terminated for a free consultation.

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