Overtime Issues In Self-Storage

Understanding The Regulations

An ongoing issue in the self-storage industry is addressing the hours worked by managers who live on the facility premises. Although the concept of resident managers has continued to disappear over the last few years, there remain a significant number of properties that have apartments on the premises for use by their facility managers. The concept of “resident managers” was initially meant to offer customers a sense of security by having someone live where their property was being stored. Resident managers also offered a level of customer service to their tenants through their presence on the property during off hours. But along with that “live where you work” philosophy comes the risk that employers and employees may have different expectations of hours for managers to work. This issue has been addressed by the Department of Labor since it is not uniquely an issue with resident managers at self-storage facilities. The issue also arises with apartment managers, firefighters, and other jobs where employees may reside at their workplace.

The Department of Labor has relied upon the law found in the Code of Federal Regulations (CFR), specifically 29 CFR 785.23 which reads as follows:

§ 785.23 Employees residing on employer’s premises or working at home.

An employee who resides on his employer’s premises on a permanent basis or for extended periods of time is not considered as working all the time he is on the premises. Ordinarily, he may engage in normal private pursuits and thus have enough time for eating, sleeping, entertaining, and other periods of complete freedom from all duties when he may leave the premises for purposes of his own. It is, of course, difficult to determine the exact hours worked under these circumstances and any reasonable agreement of the parties which takes into consideration all of the pertinent facts will be accepted. This rule would apply, for example, to the pumper of a stripper well who resides on the premises of his employer and also to a telephone operator who has the switchboard in her own home.

Based on this rule, storage operators can set guidelines with their employees to hopefully avoid any dispute over the issue of hours to be worked, even if the employee lives on the premises. These guidelines are best covered in the employee’s employment contract or employment handbook. For example, the section relating to a resident manager living in the facility’s apartment may read in part as follows:

Hours: Employer and Employee hereby agree that Employee’s normal hours of work are _____ to _____. Monday through Friday and _____ to _____. Saturday, with _____ minutes off for lunch, for a total of _____ work hours per week. Employer and Employee understand Employee resides on Employer’s premises as a matter of convenience to Employee and that he/she will not be working all the time that he/she is on the premises. Employer and Employee contemplate that Employee will engage in normal private pursuits and therefore have enough time for eating, sleeping, entertaining, and other periods of complete freedom from all duties during much of the time that the Facility office is open. Because it is difficult to determine the exact number of hours to be worked by Employee, Employer and Employee have evaluated all of the pertinent facts surrounding Employee’s work circumstances and have decided that _____ hours per week is a reasonable estimate of the number of hours Employee will work each week, considering both normal and abnormal or emergency situations. If circumstances change so that this Agreement no longer reflects a fair estimate of the number of hours that Employee works, Employee agrees to immediately notify Employer in writing of such changed conditions so that a new Employment Agreement, reflecting a fair and reasonable estimate of the number of hours Employee works per week, may be negotiated. The foregoing takes into consideration all of the pertinent facts and is expressly recognized as an agreement between Employer and Employee pursuant to 29 C.F.R. § 785.23.

By addressing this issue with the employee resident manager up front, the goal is to avoid later disputes that may arise concerning differing expectations of work to be performed. Those disputes may simmer until there is a resignation or termination and the uncertainty over unpaid overtime claims for “working at night or on weekends” can lead to significant wage and hour claims and lawsuits.

Thanks to Rob Kerr from the Oklahoma Self Storage Association for asking this question.