What You Need to Know About New York City’s Law on Severance Pay for Hotel Service Employees

Below a brand new New York Metropolis regulation (Int. 2397-2021-A), lodges with at the very least 100 rooms should pay weekly severance of $500 per worker per week to laid-off workers for up to 30 weeks if their lodge both (1) skilled a mass layoff of 75% or extra of their workforce employed as of March 1, 2020, throughout any 30 day interval or (2) closed to the general public on or after March 1, 2020, and haven’t but (a) as of October 11, 2021, recalled 25% or extra of its workers employed as of March 1, 2020, and (b) reopened to the general public by November 1, 2021.

The Metropolis has not issued steerage on the interpretation and enforcement of the regulation.

Triggering Occasions

Below the regulation, the severance pay obligation is triggered the place the lodge skilled a coated “closure” or “mass layoff.”

A closure that may set off the severance pay obligation implies that the lodge:

  1. Was closed to the general public on or after March 1, 2020;

  2. Didn’t, by October 11, 2021, recall at the very least 25% of the staff employed as of March 1, 2020; and

  3. Didn’t reopen to the general public by November 1, 2021.

A “mass layoff,” which additionally would set off the duty, means a discount in power that’s not the results of closure, lockout, or strike and that resulted in a layoff by a lodge employer throughout any 30-day interval of at the very least 75% of the staff engaged in lodge service on the lodge as of March 1, 2020.

Coated Employees

The regulation offers for severance funds of $500 per week to “covered hotel service employees,” up to a most of 30 weeks.

“Covered hotel service employees” embrace people who had been:

  1. Employed for at the very least one 12 months by the lodge on March 1, 2020;

  2. Employed to present work in reference to the operation of the lodge; and

  3. Laid off after March 1, 2020, due to a closure or a mass layoff.

“Covered hotel service employees” expressly excludes managerial, supervisory, or confidential workers and people who train management over the administration of the lodge.

The duty to pay severance ceases on the later of when both the worker is recalled, or, if the lodge that skilled a closure reopens, on the date when the lodge is reopened to the general public and has recalled at the very least 25% of its workers employed as of March 1, 2020.

Calculating Proportion of Employees

Whereas “covered hotel service employees” is expressly outlined, the time period “employees” will not be. Accordingly, all references to percentages (i.e., mass layoffs of at the very least 75% workers or the recall of at the very least 25% workers) may have to embrace all workers, not simply these outlined as “covered hotel service employees.” 

Different Uncertainties

The brand new regulation additionally has quite a few imprecise phrases giving rise to authorized uncertainty. For instance:

  • It’s unclear if severance wants to be paid to workers of distributors or concessionaires working inside a lodge.

  • It’s unclear how workers who go away voluntarily or refused to return when recalled, are to be handled.

  • It’s unclear beneath what circumstance an worker is excluded as a “managerial, supervisory or confidential employee.” This can be a frequent subject for positions like a “housekeeping supervisor” who usually inspects the work of others.

Cures

The implications of failing to adjust to the regulation might be important. Consequently, many lodges are complying with the regulation regardless of its authorized uncertainty. Severance funds are required inside 5 days of the top of the week for every week the worker is entitled to severance.

The regulation offers for a non-public proper of motion and the worker can be entitled to double damages plus cheap lawyer’s charges and prices.

Lodges Completely Closed, Transformed

Lodges which might be completely closed or transformed (or within the technique of changing) to various use are exempted from the severance pay provision, as long as they provide coated lodge service workers severance of 20 days per 12 months of service and the severance is tied straight to the conversion. This severance have to be paid on the identical price the coated lodge service worker is paid for paid days off.

A lawsuit was filed by the Hotel Affiliation of New York Metropolis on October 8, 2021, difficult the validity of the regulation and searching for declaratory and injunctive reduction. Nonetheless, absent some motion to enjoin the implementation of the regulation, the lawsuit itself didn’t stop the regulation from going into impact.

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