Hotels Sue to Overturn Los Angeles Living Wage Law

HIL ANDERSON, SENIOR EDITOR
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Los Angeles, CA – Two industry associations representing Los Angeles hotels have sued to overturn a so-called living wage ordinance passed by the city council.

The American Hotel & Lodging Association (AH&LA) and the Asian American Hotel Owners Association joined forces in the suit filed in U.S. District Court on December 16, calling the city’s move to increase the minimum wage paid to hotel workers a “dangerous precedent” that opens the door for union organizers.

“We did not come to this decision lightly, but the actions of the city compelled us to seek legal recourse,” said Katherine Lugar, president and CEO of the AH&LA. “This ordinance sets a very dangerous precedent. Wherever these types of egregious and targeted ordinances appear, the hotel industry will respond.”

The Los Angeles City Council passed the measure in September mandating a $15.37 per hour minimum wage for hotel workers. The measure goes into effect in July 2015 for major hotels, and a year later for smaller inns. The measure only applies to hotel workers and is more than $6 above California’s current minimum wage of $9 per hour.

Supporters of the raise contend it is needed in order to keep hotel workers from being mired in poverty. The trade show industry has remained on the sidelines, but keeping a watchful eye on the possibility that room rates and food-and-beverage costs could increase.

The hotel associations, however, focused on the legalities of the ordinance rather than the rate paid to their employees. “Our workers are the backbone of every hotel,” Lugar said.

The hoteliers alleged that the ordinance violated federal labor laws by interfering with employee-employer relations. They also objected to a provision that exempts hotels from the law, allowing them to pay less than $15.37, if they are covered by a collective bargaining agreement with a union. The plaintiffs said the provision indicated the ordinance was more about increasing union membership rather than improving living standards.

“The city’s ordinance is clearly designed to put a thumb on the scale in favor of labor and disrupts the careful balance between labor and management,” Lugar said.

Reach Katherine Lugar at (202) 289-3100 or klugar@ahla.com