Emanuela Lupu-Ferrante and Jack Malley in Legal/Financial on October 15, 2019
In our practice, we have seen an uptick in lawsuits by live-in superintendents and other full-time employees against cooperatives, condominiums, homeowners associations (HOAs), and even managing agents (who are defined as employees under federal regulations). These lawsuits are frequently commenced after the employee has been terminated, and they typically allege that the employer failed to pay overtime wages.
Unfortunately, many boards cannot adequately defend themselves against these lawsuits because they have not kept records of the employee’s hours worked, which they are required to do by law. In most instances, without these records, the employer is liable to the employee for the unpaid overtime wages the employee claims to have worked, plus “liquidated damages” (which double the amount of wages owed), and the employee’s attorneys’ fees.
The question of whether state or federal law controls superintendent overtime claims had been a source of confusion, but there has been a recent clarification. The pertinent state law is the New York Department of Labor Building Service Industry Minimum Wage Order (the “NY Wage Order”). Under this law, live-in superintendents are not entitled to overtime pay. In contrast, the federal law, which falls under the Fair Labor Standards Act (“FLSA”), requires employers to pay overtime to live-in superintendents.
On March 14, 2019 the U.S. Department of Labor sought to resolve this conflict by issuing an opinion that the overtime requirements set forth in the federal FLSA supersede the overtime exemption contained in the state NY Wage Order. Thus, based on the opinion, as well as several recent court decisions that concur, boards must provide overtime pay to live-in superintendents, even in instances where a union contract provides to the contrary.
So how can boards avoid an overtime lawsuit by a superintendent? First, they must keep track of the hours a superintendent works, either by a sign-in sheet, punch clock, or other reliable method. Second, they must have a policy that a superintendent cannot work overtime hours unless he has written authorization from the board or managing agent. The only exception would be for emergencies, such as a flood or fire. In that case, the superintendent would be required to report the overtime hours to the managing agent or board after the emergency work has been completed. In non-union buildings, boards should enter into an employment contract with the superintendent that addresses these items and the other terms and conditions of employment.
Superintendent lawsuits also frequently include claims under the New York Wage Theft Prevention Act for failure to provide the superintendent with a hire notice that discloses, among other things, the employee’s regular hourly pay rate and overtime pay rate, and for failure to include certain required information in the employee’s pay stubs. Employers can be liable to the employee for as much as $5,000 for each violation, depending on how long the violation lasts. Boards can avoid these risks by providing all new employees with a hire notice that is available on the New York Department of Labor website, and by demanding an assurance from its payroll company that its pay stubs comply with New York law.
And remember: keep track of your superintendent’s overtime hours.
Emanuela Lupu-Ferrante and Jack Malley are partners at the law firm Spolzino Smith Buss & Jacobs.
Thinking of buying a co-op or condo? Already bought, and not sure how co-op/condo life and rules work? Learn all about purchasing a place and living in your new community. It's not like renting, and its not like owning a house. What's it like?