Business & Economy

Minimum wage: 2 hotel industry groups sue LA over increase

Beginning next summer, most hotels in Los Angeles will have to start paying their employees $15.37/hour. Two hotel industry groups have sued the city in response.
Beginning next summer, most hotels in Los Angeles will have to start paying their employees $15.37/hour. Two hotel industry groups have sued the city in response.
Photo by Kevin Dooley via Flickr Creative Commons

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Two hotel industry groups have sued the city of Los Angeles over the minimum wage hike approved earlier this fall.

The American Hotel & Lodging Association and the Asian American Hotel Owners Association filed the lawsuit Tuesday in response to the ordinance, which raised the minimum wage for hotel workers in the city to $15.37.

The suit seeks to enjoin the city from interfering with the collective bargaining process.

"The City of Los Angeles is being pulled into taking sides between unions and hotels," Chip Rogers, interim president of AAHOA, said in a statement. "The City Council doesn't have the authority to rewrite federal labor law, and this ordinance effectively gives unions the ability to pick and choose when and where the provisions of this ordinance will be enforced. That's not right."

An exemption exists for collective bargaining, but the plaintiffs argue that it empowers unions to waive any part of the new ordinance for any hotel they cover through a collective bargaining agreement.

The debate first heated up when the ordinance was proposed in February.

"The City of Los Angeles has invested tremendously in creating a climate that has allowed large hotels to thrive," Councilman Mike Bonin said then. "It is fair and reasonable that these hotels would pay their employees a fair living wage — especially when doing so would greatly benefit neighborhoods in Los Angeles."

Bonin was one of five council members to propose the ordinance. He said a study by the city's Economic Development Department found 43 percent of people who work in hotels earn wages that place them below the federal poverty line.

Business leaders have been opposed since the outset.

"This isn’t about helping the working poor," Ruben Gonzalez, vice president of public policy at the Los Angeles Area Chamber of Commerce, said at the February council meeting. "This is about government using regulations to help unions organize."

The City Council approved the ordinance 11-2 on October 1, with council members Mitch Englander and Bernard C. Park voting "No."

Two other proposals have surfaced since then, both aimed at increasing the minimum wage more broadly and not just for workers in the hotel industry.

Mayor Eric Garcetti wants to increase it to $13.25 an hour by 2017 and four council members want to see an increase to $15.25 by 2019.

Both proposals have stalled, however, while a firm hired by the city studies the potential economic impact. The firm's study is due back in February.