Industry NewsHotel Industry to Fight L.A. Minimum Wage Increase

Hotel Industry to Fight L.A. Minimum Wage Increase

The Los Angeles City Council held its final vote today to approve a measure that raises the minimum wage to $15.37 for hotel workers employed at large non-union hotels. The council voted 12-to-3 on Sept. 24 to impose the minimum wage hike and reconsidered the matter today as a formality since the vote was not unanimous. The ordinance will go into effect in July 2015 for hotels with at least 300 rooms, expanding a year later to hotels with at least 150 rooms.

Supporters of the measure, who say this decision will pull families out of poverty, include organized labor, more than a dozen neighborhood councils, and the ACLU of Southern California. Meanwhile, opponents include the California Hotel & Lodging Association, the Hotel Association of Los Angeles, and the American Hotel & Lodging Association, who are engaged in a campaign to push back against what they deem a precedent-setting, discriminatory measure since it only targets hotels. In response to the council’s final vote, AH&LA today unveiled steps to fight the proposed ordinance.

In a statement, AH&LA President and CEO Katherine Lugar said the City Council passed the law despite hard data that shows this measure will trigger significant job losses and put future development at risk. “We have initiated a public records request that will help illuminate the true motivations behind this rushed decision and whether the proposal itself or the council’s numerous missteps provide grounds for litigation,” Lugar said.

Lugar argues that the proposal is a blatant attempt by labor bosses to increase their membership. “It’s no surprise that unionized hotels are given a waiver from the council’s hotel-only proposal,” she said. “This waiver is designed to provide labor with an unfair advantage in future negotiations with non-unionized hotels.”

In addition to the public records request, AH&LA is evaluating all available legal recourses to strike down the measure.

According to the association’s recently released “Hotel Pay Practices Report,” the hotel industry pays its employees minimum wage in eight out of 10 hotel jobs and the majority receive substantial benefits packages.

“The hotel industry takes pride in offering competitive wages and good health benefits to our employees—while providing a clear path for upward mobility and a life-long career,” Lugar said. “More than half of our general managers started in minimum wage positions, which is a testament to the opportunity that exists in this industry.”

AH&LA is prepared to work with government officials at every level to ensure that wage increases are fair and reasonable and to protect small business owners and job growth, Lugar added.

Los Angeles is also considering another proposal by Mayor Eric Garcetti that would increase the citywide minimum wage to $13.25 over a period of three years, followed by increases tied to the inflation rate. Garcetti released the plan on Sept. 1.