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Los Angeles May Hand Tips
to Hotel Crews
The City Council is Studying a Plan to Force LAX-Area Facilities to Give Service Charges
Directly to Employees
Daily Breeze - October 23, 2006
By Dan Laidman
The labor battle in the Century Corridor near Los Angeles International Airport this year has spawned mass arrests, protests, prayer vigils and even an altercation involving a city politician.
Now the fight has shifted to City Hall, where the council will soon be considering a package of laws aimed at improving the pay and working conditions for area hotel workers. And while proposals to boost the workers' salaries and protect their jobs during a change of ownership have drawn a great deal of attention, it is a separate policy that may end up having much wider implications.
A law requiring LAX-area hotels to pass along any "service charges" directly to employees would be the first of its kind in California, according to both hotel industry officials and labor advocates. It would apply to charges automatically added onto a bill, typically at a hotel banquet or for room service or the delivery of baggage to a room.
Councilwoman Janice Hahn, who chairs a committee overseeing LAX and tourism, said she hopes other cities follow Los Angeles' lead.
"Everyone -- I know I did -- assumes that those people who work picking up the plates, serving the food and moving through those banquets, were getting the money," Hahn said. "When they told me that they were lucky if they got 5 percent or 8 percent, I was absolutely shocked."
California Hotel and Lodging Association chief Jim Abrams sees the law as a new twist on a trend of labor unions getting their allies in city governments to pressure employers through burdensome ordinances.
"This is the first time we've seen an effort to have a city council get into the day-in and day-out management of business and say we're going to start telling you how to handle money you get from your customers," he said.
There is some precedent for the city's proposed "living wage" and "worker retention" laws for Century Corridor hotel employees, but Abrams said he does not know of any similar law related to service charges in the state.
Representatives of the American Hotel and Lodging Association were not aware of any other U.S. cities having such laws. On the state level, Massachusetts has a similar rule requiring such charges to be passed on to employees, as does Hawaii, which allows businesses to take a cut if that is specifically disclosed to customers.
The Los Angeles proposal comes amid a long-running effort by the city's labor community to organize the workers at Century Boulevard's chain of enormous hotels. As unions have held vigils and demonstrations -- including the mass September action that resulted in hundreds of arrests -- the influential nonprofit Los Angeles Alliance for a New Economy has worked with city officials on the package of proposed laws.
The proposals are partially based on testimony from workers gathered by a labor and community- backed committee convened earlier this year and led by former Westchester-area Councilwoman Ruth Galanter. Numerous workers complained that they are reliant on gratuities that come in the form of automatic service charges, but their employers only pass part of it along to them.
Lennox resident Ana Mendez said she makes $6.75 per hour as an on-call banquet server at a Century hotel. Banquets typically include a 20 percent service charge, but managers have told Mendez and her colleagues that they only pass along 8 percent to the staff, she said.
"We're not asking for anything that we don't work for and we don't deserve," she said. "It's our money, it's what we work for."
The Alliance for a New Economy has calculated that the average part-time banquet worker in the LAX area makes about $11,000 per year, and that could be nearly doubled by passing through all of the service charges, said James Elmendorf, a policy analyst for the group.
"It seems pretty clear to us the only purpose of (the service charges) is to make it look to customers like it is a tip," he said. "If it's not going to workers then it's deceiving customers, and of course it's having workers live in poverty."
Cindy Boulton, general manager of the Radisson LAX Hotel, said that workers benefit from the entirety of the service charges no matter how they are initially divided up. It is common for the hotels to give some directly to workers in the form of tips, she said, and to put the rest into the ongoing salary budget.
"They're used either directly or indirectly to pay banquet staff competitive wages," she said.
With gratuities and benefits figured in, the hotels often pay banquet servers $16 to $19 per hour, Boulton said. Other portions of the service charges that do not go toward workers' pay go toward expenses related to the event in question, she said.
Abrams of the California Hotel and Lodging Association said that most hotels pass along the bulk of their service charges to workers, but it is common for some of the money to go to the sales managers who bring in events and other such related expenses.
There is already a clear distinction between tips or gratuities and services charges in state law, Abrams said.
"The money belongs to the employer," he said. "The employer pays income tax on it; if the employer pays it out to employees, they run it through payroll taxes. Now L.A. is saying we don't care, we're going to start deciding."
City officials justify the proposed regulations by noting that the hotels are dependent upon city-operated LAX for their business. |
For over 20 years, Isabel “Segunda” Brentner has worked at the LAX Hilton, keeping her focus on her family and her job. “My priorities [were] to help my family,” says Brentner, who, along with raising her own children, cared for both her father and grandmother when they were ill. 
Enedina Alvarez, a 54-year-old single parent, says she must be both mother and father to her teenage children. Yet, with two jobs, she has barely enough money to house, feed and clothe them—and precious little time to spend with them. Although she receives health insurance through her job, she cannot afford to insure her children. Alvarez says, “I pray to God that my kids do not get sick because I cannot pay the medical bills.” 
Nearly all hotel housekeepers are women. The majority are women of color and immigrants.
