United States: Hotel California: Annual Minimum Wage Increases Take Place On July 1

The California cities of Santa Monica, Long Beach, and Los Angeles each mandate a separate minimum wage payable to hotel workers.1 The rates adjust annually on July 1. Below is a summary of the new rates, effective July 1, 2018.

In addition to mandating a separate minimum wage, each of these ordinances requires employers to provide compensated time off for covered employees. They also impose certain conditions relative to the collection and distribution of service charges and prohibit retaliation.2 Finally, tips and service charges earned by employees may not be used to offset the minimum wages. This article briefly highlights some of these requirements as well.

Los Angeles

Effective July 1, 2015, Los Angeles enacted its Citywide Hotel Worker Minimum Wage Ordinance, applicable to hotels with 150 or more guest rooms, which requires hotel employers3 to pay their employees a set minimum wage and provide 96 compensated hours of time off along with at least 80 additional hours of uncompensated time off per year.4

The threshold number of rooms is calculated based on the number of rooms upon hotel opening or on December 31, 2012, whichever is greater. The calculation includes any contracted, leased or sublet premises connected to or operated in conjunction with the hotel's purpose or providing services at the hotel. "Hotel worker" is defined broadly in the ordinance to include any employees employed at a hotel, other than managerial, supervisory and confidential employees.

In Los Angeles, service charges cannot be retained by the employer or by any supervisory employee and must be paid, by the next payroll following collection of the amount, to the workers performing the services. "Service charge" is defined to include any separately designated charge that a guest might reasonably believe is for service, including delivery charges or porterage charges.

Long Beach

Long Beach enacted Measure N on November 6, 2012, requiring minimum compensation and at least five compensated sick days for hotel workers.5 This provision applies to employers operating hotels of 100 or more guest rooms. As in Los Angeles' provision, "Hotel" is broadly defined and includes premises connected to or operated in conjunction with or providing services at the hotel.

In addition to the annual minimum wage increase, employers should be aware that written notice of that rate adjustment must be provided to covered Long Beach employees by July 1, 2018.

Long Beach's municipal code prohibits retention of any portion of a service charge. Moreover, the ordinance requires that such charges be paid to the hotel workers performing services for the customers from whom the charges are collected, equitably, according to the services described to the customers, and by the next payroll cycle.

Santa Monica

Santa Monica's ordinance applies to all hotels regardless of size, except youth hostels.6 "Hotel" is defined to include businesses that contract, lease, or sublet on hotel property or provide services on hotel property. The ordinance prohibits a hotel employer from funding the wages and benefits required by reducing the pension, vacation, or other non-wage benefits of any hotel worker, or by increasing charges to hotel workers for parking, uniforms, meals, or other work-related materials or equipment.

Santa Monica hotel employers must comply with the city's separate ordinance7 mandating that service charges must be paid to employees performing the services. This additional provision allows such charges to be shared between front and back of house employees—except that porterage charges, room service charges and banquet charges must be paid to the specific employees who actually perform those tasks. Santa Monica's service charge ordinance requires that employers maintain certain records, provide written disclosure of the method of distribution of charge proceeds, and report the amounts collected and distributed to employees at each payroll period.


Hotel Size

Minimum Wage (Current)

Minimum Wage
(July 1)

Compensated Time Off

Notice Requirement for Minimum Wage Rate Changes?

Los Angeles

150 or more rooms as of hotel opening or December 31, 2012, whichever is greater.



Hotel workers must be provided 96 hours compensated time off per year, which accrues at rate of 96/52 per week of full-time employment up to cap of 192 hours. Part-time workers (less than 40 hours per week) accrue time off in proportional increments. Employees must be allowed to use the time after first six months of employment unless existing policies allow for use at an earlier time.

Hotel employers must also provide an additional 80 hours of uncompensated time off to full-time employees to be used for illness of the worker or a member of the worker's immediate family where compensated time off has been exhausted for the year. Part time workers accrue such time proportionally.

No specific provision.8

Santa Monica

No minimum size threshold.



Through a statute applicable to all workers, Hotel employees accrue 1 hour paid time off per 30 hours worked. The time off accrues up to a cap of 40 hours for small businesses (25 or fewer employees) and 72 hours for larger businesses (26 or more). The time may be provided at the beginning of the year as a whole if consistent with accrual amounts; can be carried over annually (calendar, fiscal or hire date) up to cap. Use of sick leave follows California's statewide paid sick leave law.9

By July 1 in English, Spanish and any other language spoken by 5% or more of workforce

Long Beach

100 or more guest rooms.



Hotel employees are entitled to 5 days per calendar year upon request without certification of illness. The time accrues 5/12 of a day for each month and may use as soon as accrued. Unused accrued time is to be paid to employees at end of calendar year.

By July 1.


1 "'Hotel worker' means any individual whose primary place of employment is at one or more [h]otels and who is employed directly by the [h]otel [e]mployer, or by a [p]erson who has contracted with the [h]otel [e]mployer to provide services at the hotel." L.A., Cal., Mun. Code § 186.01. The Santa Monica and Los Angeles municipal codes further provide that the definition of "hotel worker" does not include a managerial, supervisory or confidential employee.

2 All three ordinances also provide that the provisions may be waived pursuant to a collective bargaining agreement if certain conditions are met.

3 "Hotel employer" refers to a person (or entity) "who owns, controls, and/or operates a [h]otel in the [C]ity, or a [p]erson who owns, controls, and/or operates any contracted, leased or sublet premises connected to or operated in conjunction with the [h]otel's purpose, or a [p]erson who provides services at the [h]otel." L.A., Cal., Mun. Code § 186.01.

4 L.A., Cal., Mun. Code §§ 186.02, 186.04.

5 Long Beach, Cal., Mun. Code § 5.48.020.

6 Santa Monica, Cal., Mun. Code § 4.63.010.

7 Id. § 4.62.040.

8 Los Angeles' ordinance does not reference a specific requirement to provide written notice to Hotel Employees of rate changes; however Hotel Employers must notify hotel workers of their possible right to earned income credit under 26 U.S.C. § 32. While there is no specific notice required of minimum wage rate changes, every employer must post notice of minimum wages. See L.A., Cal., Mun. Code § 188.03.

9 Cal. Lab. Code § 245 et seq.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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