Labor & Employment: Think Locally, Act Accordingly

A New Mantra in Hospitality

By Dana Kravetz Firm Managing Partner, Michelman & Robinson, LLP | October 01, 2017

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.

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.