While most of us were watching the presidential election results closely last month for what hospitality employers can expect to see from a labor perspective in the next four years, perhaps a referendum in Long Beach, California, may better predict what might lie ahead. On November 6th more than 60% of the city's voters voted for Measure N, a special living wage ordinance applicable only to large hotels.
The referendum was sponsored by the Long Beach Coalition for Good Jobs and a Healthy Community, an organization allegedly consisting of community, labor, religious and student leaders and groups. UNITE HERE Local 11, a key player in the Coalition, heavily backed the ordinance as well. Local 11 had been attempting to organize hotels in Long Beach for years, with little success. Long Beach reportedly has 16 or 17 hotels with more than 100 rooms, only two of which are unionized. But there is more than one way to skin a cat.
The new ordinance places three requirements on hotels with more than 100 rooms. First, hotels must pay employees at least $13 an hour. Tips, gratuities, commissions and service charges are not counted as part of the minimum wage. The minimum wage is to increase annually by the greater of two percent or the cost of living.
Second, all service charges must now be paid in their entirety to the hotel workers performing the services for whom the service charges were collected. Third, hotel workers are to receive at least five compensated sick days off per calendar year, without being obligated to provide any certification of illness. Employees earn sick leave on a monthly basis, and any sick leave accrued but not used at the end of the year is to be paid out to the employees.
The only exception to these requirements is for unionized hotels. Any provision of the new ordinance may be waived in a bona fide collective bargaining agreement, but only if the waiver is explicitly set forth in the agreement in clear and unambiguous terms. Unilateral implementation of contract terms shall not constitute a waiver of the provision of the ordinance. Employees are entitled to bring suit to enforce the ordinance, and are entitled to attorneys' fees if successful. Employers are prohibited from discriminating against employees for exercising their rights under the ordinance.
This is the third California municipality to adopt a minimum wage law specifically for hotel workers. Emeryville adopted an ordinance via referendum back in 2005 requiring hotels with more than 50 rooms to: (i) pay a minimum wage of $9 per hour and a minimum average compensation for all employees of $11 per hour, to be adjusted annually for inflation; (ii) provide for paid jury duty; (iii) pay overtime for housekeepers if they clean over a certain amount of square footage of floor space; and (iv) in the event of a sale, retain the predecessor employees for at least ninety days. In 2007, Los Angeles also adopted an ordinance requiring hotels with fifty or more rooms within the Airport Hospitality Enhancement Zone (Century Boulevard) near LAX to provide, unless waived by a union contract: (i) a minimum wage effective July 1, 2007, of $10.64 per hour without health insurance, or $9.39 with health benefits, adjusted annually in January for inflation; (ii) twelve compensated days off per year for sick, vacation or personal leave, plus ten uncompensated days off for sick or family illness leave.
Is this a trend or a fluke? Is it legal, given it appears to favor unionized employers at the expense of non-unionized employers and it specifically targets one industry, or is it simply a governmental entity lawfully setting minimum employment standards? Is this really good long-term for employees and the communities at issue, given competing hotels just outside of these jurisdictions are now at a distinct competitive advantage?
These are all valid questions, for which there should be a healthy debate. But there is one more question that needs to be asked: How long will it be before other communities outside of California are pressured to adopt similar hospitality-specific minimum wage legislation? Many communities have adopted general minimum wage ordinances, with Albuquerque, N.M., approving one just last month. As reported earlier, click here, Providence, Rhode Island adopted and successfully defended a hotel-specific successorship ordinance. As reported elsewhere in this newsletter, fast food workers in New York City, supported by the SEIU and community organizers, walked out in support of $15 minimum wages. Similarly, last month Chicago food and retail workers launched the Chicago Food and Retail Union and held a rally on Chicago's Michigan Avenue to kick off a union organizing campaign -- Fight for $15 -- to demand that local employers boost their wages to a minimum of $15 an hour.
Long Beach will not be the last community to adopt a hospitality-specific wage ordinance. Hospitality employers should expect to see more activity by unions and community organizers to, through a variety of activities, pressure local communities to adopt minimum wage ordinances, including those specific to industries such as hospitality.