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Mr. Kravetz

Hospitality Law

Labor & Employment: Think Locally, Act Accordingly

A New Mantra in Hospitality

By Dana Kravetz, Managing Partner, Michelman & Robinson, LLP

The matters weighing on the minds of hotel and resort owners and operators are many: average daily rates, occupancy levels, market penetration, revenue generation, operating costs, growth trajectories, tourism trends, customer service demands, real estate concerns, budget constraints, inventory management, cyber security and effective marketing strategies are a few of the major ones. Labor and employment issues are an unusually significant source of concern for hotel executives as well, demanding a disproportionate amount of their attention given the burdensome legal requirements imposed upon employers.

On the employment front, better days for hoteliers and corresponding trouble for their employees have been forecasted as a consequence of President Trump's imprint upon the Department of Labor and National Labor Relations Board. But the optimistic outlook for hotels and resorts, at least on the national stage, is tempered in many jurisdictions by state and local laws that are decidedly pro-labor. And beyond the enactment of employee-friendly legislation, local activism concerning a breadth of other issues - including hotel privacy - is also impacting the hospitality business. Taken together, it is worthwhile to address two questions of great importance within the industry: notwithstanding the messages emanating from Washington, D.C. that are sympathetic to business, what is happening at the grassroots level that relates to hotel and resort operations, and does local regulation even matter?

State and Local Ordinances

The minimum wage, paid family leave, employee discrimination and safety, tip credits, an employer's right to inquire about the salary history of job candidates, and the ability of police to search hotel guest registers are amongst the focus of ongoing state and local lawmaking that is keeping hoteliers on their toes. A brief survey:

Minimum Wage

In recent years, the minimum wage has been on the rise throughout the U.S. by virtue of ballot initiatives and legislation passed in several states, including Alaska, Arizona, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, New Jersey, New York, Ohio, Oregon, Rhode Island, South Dakota, Vermont, Washington and West Virginia. Minimum wage increases have also been enacted by way of local ordinances in cities such as Albuquerque, Las Cruces, Oakland, Palo Alto, Sacramento, San Diego, San Francisco, Santa Monica, Seattle, Tacoma and Washington, D.C.

The amount employees earn in these jurisdictions varies, but each provides for pay that exceeds the federal floor of $7.25 per hour. Hotel and resort management, faced with a number of differing employee-leaning wage and hour laws, are compelled to stay abreast of the applicable (and ever-changing) minimum wage, especially to the extent they operate properties in multiple locales.

Paid Leave

In addition, a number of states and municipalities have implemented paid leave laws, resulting in a compliance nightmare for the hospitality sector. Paid sick leave requires employers to provide sick time for employees, while paid family and medical leave guarantees support (a percentage of an employee's salary for a period of time) to those caring for newborn children or aging parents, or addressing serious health issues.

Jurisdictions with (or soon to have) paid leave laws on the books include Arizona, California, Connecticut, Oregon, Massachusetts, New Jersey, New York, Puerto Rico, Rhode Island, Vermont and Washington. In addition to these are more than 30 counties and cities - Chicago, Los Angeles, New York City and Washington, D.C., among them - that require employers doing business within their boundaries to offer paid sick leave. For its part, San Francisco became the first municipality to pass a parental leave ordinance.

For employees, the foregoing state and local regulation is entirely welcome, particularly in the absence of any federal guidance. That being said, paid leave creates a significant challenge for hospitality employers - one that cannot be overstated - given the lack of uniformity from state-to-state and city-to-city. To navigate the nuances of these varying (and oftentimes confusing) laws, hoteliers are encouraged to turn to local counsel who can review leave policies and advise on legal compliance and other related matters.

Unisex Restrooms, Panic Buttons and More

Marquee issues like minimum wage and paid leave are not the only items within the crosshairs of state and local legislators. Non-discrimination is another hot-button topic, as evidenced by laws passed in several states and more than 200 cities across the country that protect individuals against bias based upon marital status, sexual orientation and gender identity, among other things. These laws - many that concern discrimination in the employment setting - are as varied as they are state and city-specific.

Take, for example, California Health and Safety Code §118600, which regulates access to public restrooms and requires employers and businesses in California (hotels and resorts included) having single-user bathrooms to identify such facilities as "all gender." This recently enacted state law, billed as the most inclusive in the nation, mirrors similar ordinances in the cities of Austin, Philadelphia and Seattle. Yet the access it affords to the transgender community is opposed in other less liberal jurisdictions. The result: conflicting access laws - a subset of the disparate anti-discrimination laws in effect throughout the U.S. - that generate additional confusion for hotel owners and operators.

Clearly, when it comes to state and local activism, hoteliers, in their management capacity, have much to keep apprised of, including a law in Seattle (and proposed in Chicago) requiring that hotel housekeepers be given panic buttons in an effort to protect them from sexual assault or harassment by guests; a ban on employers in New York City, Philadelphia, San Francisco, Massachusetts, Oregon and Delaware asking questions about a job applicant's compensation history - a move designed to close the gender pay gap; and the absolute prohibition on tip credits in Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington.

Parenthetically, this wave of labor-friendly state and local laws - including those that increase the minimum wage, expand paid leave benefits, and otherwise protect the foregoing array of employee interests - begs the question: might unions be obsolete where state and local governments so actively support workers? This is an interesting - and controversial - idea to be sure, and one that is fodder for future discussion. In the meantime, it is important to note that the hospitality space is also affected by legislation unrelated to employment, which has been passed at the grassroots level.

For instance, many municipalities have ordinances in place that allow, with certain limitations, law enforcement to inspect hotel guest registers - laws presumably aimed to enhance efforts to deter or otherwise investigate criminal conduct. But by virtue of hotel privacy issues that such inspections trigger, these ordinances, for the most part, do not authorize unlimited inspections; instead, they include review procedures that vary from jurisdiction to jurisdiction.

In some cities, for example, police must be granted permission to gain access to electronic registration systems as well as traditional guest registers, and if management does not voluntary produce registry information as requested, records must be secured while search warrants are issued. Other versions of these laws set forth more detailed procedures for guest registry inspections when hotels do not willingly comply, including the personal service of written demands by law enforcement, oral and then written objections by hotel operators (if applicable), and even court action.

Whether state and local lawmaking is employment-related or addresses broader hospitality industry issues, there can be no disputing the fact that legal compliance necessitates prompt attention, significant resources and extraordinary diligence. More pointedly, hotel and resort management should take measures to understand the unique laws that apply in their areas of operation, and develop and tailor operational policies (and provide any necessary training) to ensure that all state and local mandates are followed.

Preemption

To some degree, local activism is all for naught when municipal ordinances and regulation are preempted by state law. Indeed, states can preempt cities from legislating on particular issues either by statutory or constitutional law. Thus, the answer to the question posed at the beginning of this article - does local legislation even matter? - is yes, but not always.

Not surprisingly, politically divisive issues - the minimum wage and paid leave among them - are oftentimes subject to preemption, with pro-employee laws most likely to be preempted in so-called "red states." In fact, 20-plus conservative-leaning jurisdictions, including Alabama, Georgia, Idaho, Indiana, Iowa, South Carolina and Wisconsin, currently preempt local minimum wage ordinances. Paid leave and, to a lesser extent, anti-discrimination legislation are also on the chopping block - by way of preemption - in many of these Republican strongholds.

The upshot: hotel and resort owners and operators must also be aware of state preemption statutes that limit a locality's power to make law that can be characterized as anti-business.

Think Locally, Act Accordingly

Preemption issues aside, the difficulties presented by the potpourri of state and local legislation impacting the hospitality business may be reason alone for some owners and operators not to invest in a particular locale. Nevertheless, hoteliers - above all those electing to do business in multiple cities and states - ought to take whatever steps are necessary, including consultation with local counsel, to abide by varying state and local laws that deviate from federal standards and impact their operations. Given a playing field with a patchwork of rules that lack any semblance of uniformity, such compliance is no easy task.

Dana A. Kravetz is the Managing Partner of Michelman & Robinson, LLP (M&R) and leads the firm's Employment Litigation Practice Group. Mr. Kravetz focuses his practice on counseling and litigating on behalf of hotel and resort management. He routinely defends his clients in various employment matters, including discrimination, sexual harassment prevention, wrongful termination, reduction in workforce, hiring practices, and wage and hour issues, including class action litigation. Mr. Kravetz has significant experience with virtually every aspect of employment litigation. Mr. Kravetz can be contacted at 310-564-2670 or dkravetz@mrllp.com Please visit http://www.mrllp.com/professionals-Dana-Kravetz.html for more information. Extended Bio...

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