Main Issue:
May an employer offset their minimum wage obligation owed to a resident apartment manager with the value of lodging without a voluntary written agreement that specifically mentions a "minimum wage" credit?

Holding:
No. Under California law, Brock was a resident apartment manager who was not paid at least minimum wages for all hours worked, Thus, the owners of apartment complex were not entitled to offset against the unpaid minimum wages owed for cost of lodging provided to him. This was because the owners used manager's apartment as a credit against all wages, not just specifically "minimum wage." Furthermore, the manager received absolutely no monetary compensation for his work, just a "free" apartment.

Facts:
Carrion owned a 22-unit apartment complex called Sunrise Village Apartments in Norther California. For approximately two years, Brock worked for defendants as a resident apartment where his duties included, but were not limited to, "showing vacancies, completing resident applications, collecting rent, keeping reports on rents, preparing late notices, enforcing rules, bookkeeping, cleaning apartments and entrances, policing the premises, maintaining the property, cleaning up trash ... and other similar and related job duties."

Under the terms of the Resident Apartment Manager Employment Agreement, Carrion agreed to pay Brock $550.00 per month for his duties as apartment manager, and Brock agreed to pay Carrion $550.00 per month as rent for an on-site apartment. In fact, Brock did not receive any compensation for completing his regular managerial tasks; he was simply not asked to pay for the apartment in which he resided.

Brock brought action against his employers, alleging violations of the Fair Labor Standards Act (FLSA) and California labor laws, and seeking damages in form of allegedly unpaid minimum wages and overtime wages.

Application of Law to Facts:

First, the court questioned whether the employer was excepted from their record-keeping requirement. Here, the employee just did his job. The employer made no efforts to record the hours worked. The court found that the Owner of the apartment complex was not excepted from the record-keeping requirements.

Next, the court found that owners of apartment complex, who failed to produce records or other credible evidence, failed to sustain their burden of proving "reasonable costs" of furnishing lodging to resident apartment manager, and thus, owners were not entitled to offset against allegedly unpaid minimum wages and overtime wages owed manager.

Finally, the court found Under California law, Brock was a resident apartment manager who was not paid at least minimum wages for all hours worked, Thus, the owners of apartment complex were not entitled to offset against the unpaid minimum wages owed for cost of lodging provided to him. This was because the owners used manager's apartment as a credit against all wages, not just specifically "minimum wage."