Two hotel industry groups filed a federal lawsuit Tuesday challenging a new Los Angeles law that requires a higher minimum wage at the city’s larger hotels.
The lawsuit from the American Hotel and Lodging Assn. and the Asian American Hotel Owners Assn. contends that the City Council’s decision to impose a $15.37 per hour minimum wage is preempted by federal labor law and therefore unenforceable.
The two groups also say the city is interfering with labor relations and union organizing at its larger hotels. And they voiced fears that L.A.'s ordinance could be replicated elsewhere in the country.
“It gives the unions a powerful economic wedge” to use against hotel management, said attorney Michael Starr, standing outside federal court.
Under the ordinance, hotels with a unionized workforce can be exempted from paying the $15.37 hourly wage, if workers agree in their contract to relinquish that opportunity. Hotels that face severe financial hardships also can be exempted.
The two industry groups are seeking an injunction to block enforcement of the hotel wage law, which was approved in September. The measure is set to go into effect in July for hotels with at least 300 rooms and expand a year later to hotels with at least 150 rooms.
Backers of the measure said it would prevent hotel workers from having to take on second jobs that keep them from seeing their families. They also argued that the hotels in Los Angeles have benefited from the city’s efforts at boosting the tourism industry.
Councilman Curren Price, who helped spearhead passage of the hotel wage measure, said in a statement that he had been expecting a legal challenge.
“I am confident that the city will prevail, as it has in the past with similar legal actions threatening efforts to raise wages for local workers,” Price said. “At the end of the day, this is about giving hardworking men and women a fair wage for a fair day’s work at hotels as we continue to work toward raising wages for all Angelenos.”
The hotel industry’s lawsuit claims L.A.'s wage law establishes a minimum pay that is “far above the market rate” for hotels and the restaurants that operate inside them.
The ordinance is based on “the City Council’s perception of what ‘larger hotels’ in the city are capable of paying based on the council’s assessment of their financial circumstances,” the lawsuit states.