Los Angeles Municipal Code Art. 6 Citywide Hotel Worker Minimum Wage Ordinance

(Added by Ord. No. 183,241, Eff. 11/10/14.)

Section 186.00 Purpose. 186.01 Definitions. 186.02 Payment of Minimum Compensation to Hotel Workers and Provision of Time Off. 186.03 Service Charges. 186.04 Health Benefits. 186.05 Notifying Hotel Workers of Their Potential Right to the Federal Earned Income Credit. 186.06 Retaliatory Action Prohibited. 186.07 Implementation. 186.08 Penalties and Remedies Payable to the Hotel Worker. 186.09 One-year Waiver for Certain Hotel Employers. 186.10 Waivers. 186.11 Coexistence with Other Available Relief for Specific Deprivations of Protected Rights. 186.12 Conflicts. 186.13 Severability. 186.14 Coexistence with Other Ordinances.

(Amended by Ord. No. 188,610, Eff. 9/8/25.)

After surviving the devastating impact of the pandemic on tourism in 2020, the hotels around Los Angeles International Airport (LAX) and throughout the City have thrived. Indeed, in 2023, the last full year for which statistics are available, an estimated 49.1 million people traveled to Los Angeles reaching 97 percent of pre-pandemic levels – with hotels reporting an average daily rate and revenue per room that were near record highs. This resulted in 30.2 million room-nights sold in 2023 and a record $40.4 billion worth of economic activity for the year. The number of visitors to the City is only expected to rise in the coming years to more than 70 million by 2030, and is expected to create more than 400,000 new jobs and generate up to an additional billion dollars in tax revenue for the City.

In preparation for upcoming major global events such as the 2026 World Cup and the 2028 Olympics, the City is heavily investing in infrastructure and development projects. LAX is investing $6 billion in an expansion, and Los Angeles is expected to lead the nation in the availability of new hotel rooms.

Though hotel workers are frequently the face of the industry, providing services directly to tourists, the economic benefits from the tourism industry are not evenly distributed to them. Hotel workers often live paycheck to paycheck and are frequently forced to work two or three jobs to provide food and shelter for their families. In many instances, they cannot take time to spend with their children or care for themselves or family when sick. They also rely on the public sector as a provider of social support services and, therefore, the City has an interest in promoting an employment environment that protects government resources. In requiring the payment of a higher minimum wage, this article benefits that interest.

In 2007, the Los Angeles City Council passed a living wage ordinance for workers employed in hotels near LAX, and in 2009 passed an ordinance that raised the wages for airport employees. In recognition of the commensurate need for fair wages for hotel workers throughout the City, the Hotel Worker Minimum Wage Ordinance went into effect in 2014.

The rapid increase in the cost of living in recent years has made income inequality one of the most pressing economic, social and civil rights issues facing Los Angeles. While major events such as the 2026 World Cup and 2028 Olympics will likely result in record profits for employers in the tourism industry, the workers that keep the tourism industry functional, safe, and profitable are left languishing behind. Wages and health benefits have not kept up with steep inflation and the rising cost of living, and workers continue to face persistent wage disparities, worsened by inconsistent benefits. The ill effects of low wages and benefits have had a greater impact on hotel workers because, unlike the LWO which requires employers to provide workers with a healthcare benefit payment, the current Hotel Minimum Wage Ordinance does not. Through this Ordinance, the City seeks to remedy the disparity in how hotel workers are compensated with respect to other tourism workers.

This Ordinance increases the compensation for hotel workers by requiring a higher minimum cash wage and a new minimum health benefit payment. According to a 2023-2024 Berkeley Economic Advising and Research (BEAR) study, more than 40 percent of airport workers and more than 60 percent of hotel workers will receive a wage increase because of this policy, while 15 percent and 35 percent of those respective workers will receive expanded health coverage. Per the BEAR study, the compensation and health benefit improvements contained in this Ordinance will directly and indirectly impact approximately 23,000 hotel workers. These workers are expected to increase their purchase of goods and services, thereby stimulating the economies of the City, County, and neighboring jurisdictions, in turn.

By proceeding incrementally and applying an increased minimum wage to hotel workers at larger hotels, including a hardship waiver for certain affected hotels, the City seeks to promote the health, safety and welfare of thousands of hotel workers by ensuring they receive decent compensation for the work they perform.

(Amended by Ord. No. 188,610, Eff. 9/8/25.)

The following definitions shall apply to this article:

A. “City” means the City of Los Angeles.

B. “Division” shall mean the Office of Wage Standards of the Bureau of Contract Administration within the Department of Public Works.

C. “Hotel” means a residential building or transient occupancy residential structure that is designated or used for lodging and other related services for the public, and containing 60 or more guest rooms, or
suites of rooms (adjoining rooms do not constitute a suite of rooms), or dwelling units that may be rented for periods of 30 days or fewer. “Hotel” also includes any contracted, leased or sublet premises connected to
or operated in conjunction with the building’s purpose, or providing services at the building. “Hotel” does not include a Short-Term Rental, as defined in Municipal Code Section 12.22 A.32. The number of guest
rooms, suites of rooms, or dwelling units shall be calculated based on the room count on the opening of the Hotel or on December 31, 2012, whichever is greater. “Hotel” also includes any hotel within the Airport
Hospitality Enhancement Zone, which encompasses the boundaries of the Gateway to LA Property Business Improvement District (Gateway to LA PBID), established by Ordinance Number 177,211, containing 50
or more guest rooms, or suites of rooms located within that area, and includes any contracted, leased, or sublet premises connected to or operated in conjunction with the building’s purpose, or providing services at
the building. If the Gateway to LA PBID ceases to exist, the boundaries at the time of dissolution shall remain in effect for purposes of this article.

D. “Hotel Employer” means a Person who owns, controls and/or operates a Hotel in the City, or a Person who owns, controls and/or operates any contracted, leased or sublet premises connected to or operated
in conjunction with the Hotel’s purpose, or a Person who provides services at the Hotel.

E. “Hotel Worker” means any individual whose primary place of employment is at one or more Hotels and who is employed directly by the Hotel Employer, or by a Person who has contracted with the Hotel
Employer to provide services at the Hotel. “Hotel Worker” does not include a managerial, supervisory or confidential employee.

F. “Person” means an individual, corporation, partnership, limited partnership, limited liability partnership, limited liability company, business trust, estate, trust, association, joint venture, agency,
instrumentality, or any other legal or commercial entity, whether domestic or foreign.

G. “Service Charge” means all separately- designated amounts, regardless of name or label, collected by a Hotel Employer from a customer for service by Hotel Workers, or described in such a way that
customers might reasonably believe that the amounts are for the service including, but not limited to, those charges designated on receipts under the term “service charge,” “delivery charge” or “porterage charge.”

H. “Willful Violation” means that the Hotel Employer deliberately failed or refused to comply with the provisions of this article.

A. Wages. (Amended by Ord. No. 188,610, Eff. 9/8/25.) A Hotel Employer shall pay a Hotel Worker a wage of no less than the hourly rates set under the authority of this article.

1. If a Hotel Employer provides a Hotel Worker with health benefits as provided in Section 186.04 of this article, the Hotel Worker shall be paid the following:

   (a) Beginning on July 1, 2024, the wage rate for a Hotel Worker shall be no less than $20.32 per hour.

   (b) Beginning on July 1, 2025, the wage rate for a Hotel Worker shall be no less than $22.50 per hour.

   (c) Beginning on July 1, 2026, the wage rate for a Hotel Worker shall be no less than $25.00 per hour.

   (d) Beginning on July 1, 2027, the wage rate for a Hotel Worker shall be no less than $27.50 per hour.

   (e) Beginning on July 1, 2028, the wage rate for a Hotel Worker shall be no less than $30.00 per hour.

   (f) Beginning on July 1, 2029, and annually thereafter on July 1, the hourly wage rate for a Hotel Worker shall be adjusted higher by a percentage equal to the percentage increase, if any, in the Bureau of

Labor Statistics Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Los Angeles metropolitan area, as measured from January to December of the preceding year. The Division shall announce the adjusted rates on February 1st, or within two weeks of the release of the prior year’s CPI-W, whichever is later, and publish a bulletin announcing the adjusted hourly wage rates, which shall take effect on July 1st of each year.

2. Beginning on July 1, 2026, if a Hotel Employer does not provide a Hotel Worker with health benefits as provided in Section 186.04 of this article, the Hotel Worker shall be paid the applicable wage rate in Section 186.02 A.1. and an additional wage rate per hour equal to the health benefit payment in effect for an Employee of an Employer servicing the Airport pursuant to Section 10.37.3(a)(5) of the Los Angeles Administrative Code.

3. A Hotel Employer may not use gratuities, Service Charge distributions, or bonuses earned by a Hotel Worker to offset the wages required under this article.

B. Time Off.

1. Compensated Time Off. A Hotel Employer shall provide at least 96 compensated hours off per year for sick leave, vacation, or personal necessity to full time Hotel Workers to be made available at the Hotel

Worker’s request.

(a) A full time Hotel Worker is classified as someone who works at least 40 hours a week or in accordance with the Hotel Employer’s policies, if more generous. A full time Hotel Worker shall accrue at least 96/52 hours of compensated time off each week in a calendar year that the Hotel Worker has been employed by the Hotel Employer. Compensated time off does not accrue for work in excess of 40 hours a week. Full time Hotel Workers that work less than 40 hours a week will receive the compensated time off in proportional increments.

(b) A part time Hotel Worker is classified as someone who works less than 40 hours per week or in accordance with the Hotel Employer’s policies, if more generous. A part time Hotel Worker shall

accrue compensated time off in increments proportional to that accrued by someone who works 40 hours a week, in accordance with Section 186.02 B.1.(a).

(c) General Rules for Compensated Time Off.

(i) A Hotel Worker must be eligible to use accrued paid compensated time off after the first six months of employment or consistent with company policies, whichever is sooner.

(ii) A Hotel Employer may not unreasonably deny a Hotel Worker’s request to use the accrued compensated time off.

(iii) Unused accrued compensated time off will carry over until the time off reaches a maximum of 192 hours, unless the Hotel Employer’s established policy is more generous.

(iv) After a Hotel Worker reaches the maximum accrued compensated time off, a Hotel Employer shall provide a cash payment once every 30 days for accrued compensated time off over the

maximum. A Hotel Employer may provide a Hotel Worker with the option of cashing out any portion of, or all of, the Hotel Worker’s accrued compensated time off under the maximum, but, in no

event, shall the Hotel Employer require a Hotel Worker to cash out any accrued compensated time off. Compensated time off cashed out shall be paid to the Hotel Worker at the wage rate that the Hotel Worker is earning at the time of cash out.

(v) A Hotel Employer may not implement any employment policy to count accrued compensated time off taken under this article as an absence that may result in discipline, discharge, suspension, or any other adverse action.

2. Uncompensated Time Off. Hotel Employers shall also permit full time Hotel Workers to take at least 80 additional hours per year of uncompensated time off to be used for sick leave for the illness of the

Hotel Worker or a member of the Hotel Worker’s immediate family where the Hotel Worker has exhausted their compensated time off for that year.

(a) A full time Hotel Worker is classified as someone who works at least 40 hours a week or in accordance with the Hotel Employer’s policies, if more generous. A full time Hotel Worker shall accrue at least 80/52 hours of uncompensated time off each week in a calendar year that the Hotel Worker has been employed by the Hotel Employer. Uncompensated time off does not accrue for work in excess of 40 hours a week. Full time Hotel Workers that work less than 40 hours a week will receive the uncompensated time off in proportional increments.

(b) A part time Hotel Worker is classified as someone who works less than 40 hours per week or in accordance with the Hotel Employer’s policies, if more generous. A part time Hotel Worker shall

accrue uncompensated time off in increments proportional to that accrued by someone who works 40 hours a week, in accordance with Section 186.02 B.2.(a).

(c) General Rules for Uncompensated Time Off.

(i) A Hotel Worker must be eligible to use accrued uncompensated time off after the first six months of employment or consistent with company policies, whichever is sooner.

(ii) A Hotel Employer may not unreasonably deny a Hotel Worker’s request to use the accrued uncompensated time off.

(iii) Unused accrued uncompensated time off will carry over until the time off reaches a maximum of 80 hours, unless the Hotel Employer’s established policy is more generous.

(iv) A Hotel Employer may not implement any employment policy to count uncompensated time off taken under this article as an absence that may result in discipline, discharge, suspension, or

any other adverse action.

A. Service Charges shall not be retained by the Hotel Employer but shall be paid in the entirety by the Hotel Employer to the Hotel Worker(s) performing services for the customers from whom the Service Charges are collected. No part of these amounts may be paid to supervisory or managerial employees. The amounts shall be paid to the Hotel Worker(s) equitably and according to the services that are related to the description of the Service Charges given by the Hotel Employer to the customer. The amounts shall be paid to the Hotel Worker(s) in the next payroll following collection of an amount from the customer, including without limitation:

1. Amounts collected for banquets or catered meetings shall be paid equally to the Hotel Worker(s) who actually work the banquet or catered meeting;

2. Amounts collected for room service shall be paid to the Hotel Worker(s) who actually deliver food and beverage associated with the charge; and

3. Amounts collected for porterage service shall be paid to the Hotel Worker(s) who actually carry the baggage associated with the charge.

(Title and Section Amended by Ord. No. 188,610, Eff. 9/8/25.)

Beginning on July 1, 2026, the health benefits required by this article shall consist of the payment per hour, by a Hotel Employer towards the provision of health care benefits for a Hotel Worker and dependents, equal to the health benefit payment in effect for an Employee of an Employer servicing the Airport pursuant to Section 10.37.3(a)(5) of the Los Angeles Administrative Code.

A. To be exempt from having to pay Hotel Workers with health benefits the wage rate in Section 186.02 A.2., Hotel Employers shall keep proof of the provision of such health benefits on file at the Hotel, and such proof shall be provided to the Division upon request.

B. Health benefits include health coverage, dental, vision, mental health, and disability income. For purposes of this article, retirement benefits, accidental death and dismemberment insurance, life insurance and other benefits that do not provide medical or health related coverage will not be credited toward the cost of providing Hotel Workers with health benefits.

C. If the Hotel Employer’s hourly health benefit payment is less than that required under this article, the difference shall be paid to the Hotel Worker as an additional hourly wage.

D. Health benefits are not required to be paid on overtime hours.

E. Beginning on July 1, 2027, and annually thereafter each July 1, the payment amount for health benefits provided to a Hotel Worker working for a Hotel Employer shall be adjusted by a percentage equal to the percentage increase, if any, in the California Department of Managed Healthcare’s Large Group Aggregate Rates (LGAR) report, as measured from January to December of the preceding year. The Division shall announce the adjusted rates on April 1st, or within two weeks of the release of the prior year's LGAR report, whichever is later, and publish a bulletin announcing the adjusted rates, which shall take effect on July 1st of each year.

Hotel Employers shall inform Hotel Workers of their possible right to the federal Earned Income Credit (EIC) under Section 32 of the Internal Revenue Code of 1954, 26 U.S.C. § 32.

No Hotel Employer shall discharge, reduce in compensation or otherwise discriminate against any Hotel Worker for opposing any practice proscribed by this article, for participating in proceedings related to this article, for seeking to enforce the Hotel Worker’s rights under this article by any lawful means, or for otherwise asserting rights under this article.

(Title and Section Amended by Ord. No. 188,610, Eff. 9/8/25.)

This article, including any penalties, fines, and other remedies available herein, shall be enforced by the Division pursuant to Section 188.00, et seq., of this Code. The Division may promulgate rules and regulations consistent with this article for the implementation of the provisions of this article. Any rules or regulations shall have the force and effect of law, and may be relied upon by Hotel Employers, Hotel Workers, and other parties to determine their rights and responsibilities under this article.

(Title and Section Amended by Ord. No. 188,610, Eff. 9/8/25.)

A. Civil Enforcement Action by Hotel Worker, City, or Third Parties. Any Hotel Worker aggrieved by a violation of this article, the City Attorney, or any other person or entity acting on behalf of the public as provided for under applicable state law, may bring a civil action in a court of competent jurisdiction against the Hotel Employer. A Hotel Worker or the City, upon prevailing, shall be entitled to such legal or equitable relief as may be appropriate to remedy the violation, including, without limitation, the payment or provision of any wages, health benefits, compensated time off, or Service Charges unlawfully withheld, the payment of penalties in the amount of up to $120 for each day that the violation occurred or continued, reinstatement in employment and/or injunctive relief, and reasonable attorneys’ fees and costs. Any other person or entity enforcing this article on behalf of the public as provided for under applicable state law, upon prevailing, shall be entitled only to equitable, injunctive and/or restitutionary relief, and reasonable attorneys’ fees and costs. Nothing in this article shall be interpreted as restricting, precluding, or otherwise limiting a separate or concurrent administrative action by the Division under Article 8 of Chapter XVIII, of this Code or a criminal prosecution under the Municipal Code or state law.

B. Restitution and Penalty Assessments by the Division Payable to the Hotel Worker. Every Hotel Employer who violates this article, or any portion thereof, shall be liable to the Hotel Worker whose rights were violated for any and all relief, including, but not limited to, the payment or provision to each Hotel Worker of wages, health benefits, time off, or Service Charges unlawfully withheld and an additional penalty of up to $120 per day that each of the violations occurred or continued. A violation for unlawfully withholding wages, health benefit payments, compensated time off, or Service Charges shall be deemed to continue from the date

immediately following the date that the payments were due and payable as provided in Part 1 (commencing with Section 200) of Division 2 of the California Labor Code, to the date immediately preceding the date the amounts owed are paid in full. For retaliatory action by the Hotel Employer, the Hotel Worker shall be entitled to reinstatement and a trebling of all wages, health benefits, compensated time off, or Service Charges, and penalties owed.

(Title and Section Amended by Ord. No. 188,610, Eff. 9/8/25.)

A. Penalties. A Hotel Employer who violates this article, or any portion thereof, shall be liable to the City for a penalty of up to $50 per day that wages, health benefit payments, compensated time off, or Service Charges are unlawfully withheld from a Hotel Worker. A violation for unlawfully withholding wages, health benefit payments, compensated time off, or Service Charges shall be deemed to continue from the date immediately following the date that the wages were due and payable as provided in Part 1 (commencing with Section 200) of Division 2 of the California Labor Code, to the date immediately preceding the date the wages are paid in full.

B. Administrative Fines. An administrative fine payable to the City may be assessed for a violation of any provision of this article as specified below. The administrative fine may be assessed by means of a Notice of Correction, as provided in Section 188.06, issued to the Hotel Employer by the Division.

VIOLATION AND FINE AMOUNT

Failure to post notice of the wage rates, health benefits, time off benefits, and Service Charge requirements under this article – Municipal Code Section 188.03 A. Up to $500

Failure to allow access to payroll records – Municipal Code Section 188.03 B. Up to $500 Failure to allow access to records required by this article – Municipal Code Section Up to $500 186.04 A. or 188.03 C. Failure to maintain payroll records or to retain payroll records for four years – Up to $500 Municipal Code Section 188.03 B. Failure to allow access for inspection of records or to interview employees – Up to $500 Municipal Code Section 188.03 B. or 188.03 C. Retaliation for exercising rights under this article – Municipal Code Section 186.06. Up to $1,000 Failure to provide employer’s name, address, and telephone number in writing – Up to $500 Municipal Code Section 188.03 A. or 188.05 D. Failure to cooperate with the Division’s investigation – Municipal Code Section Up to $500 188.03 C. or 188.05 D. Failure to submit documents or information to the Division within 30 days of the Up to $500 request – Municipal Code Section 188.03 B. or 188.05 D. Failure to post Notice of Correction to employees – Municipal Code Section 188.06 Up to $500 D.

C. Calculation of Administrative Fines. Each and every day that a violation exists constitutes a separate and distinct violation. Any subsequent violation of the same provision by the same Hotel Employer within three years of a prior Notice of Correction, as defined in Section 188.06, may result in a 50 percent increase in the maximum administrative fine allowed.

D. Payments to the City; Due Date; Late Payment Penalty. Administrative fines and City penalties shall be payable to the City of Los Angeles and due within 30 days of the date of the Notice of Correction, as defined in Section 188.06. The failure of any Hotel Employer to pay an administrative fine or City penalty within 30 days may result in the assessment of an additional late fee. The additional late fee shall be ten percent of the total amount of the administrative fine or City penalty assessed for each month the amounts are unpaid, compounded to include already accrued late administrative fines and City penalties that remain unpaid.

E. Penalties and Fines under Section 186.08 and 186.09. The Division shall base its imposition of penalties and administrative fines for non-compliance with the City’s laws after considering factors, including but not limited to: (1) the extent of harm caused by the violation; (2) the nature and persistence of the violation; (3) the length of time over which the violation occurs; (4) the frequency of past violations; (5) any action taken to mitigate the violation; and (6) the financial burden to the Hotel Employer.

(Title and Section Amended by Ord. No. 188,610, Eff. 9/8/25.)

A. Collective Bargaining Agreement. All the provisions of this article, or any part of the article, may be waived in a bona fide collective bargaining agreement, but only if the waiver is explicitly set forth in that agreement in clear and unambiguous terms. Unilateral implementation of terms and conditions of employment by either party to a collective bargaining relationship shall not constitute or be permitted as a waiver of all or any part of the provisions of this article.

B. Limited Hardship Waiver for Hotel Employers.

1. Waiver application. The Division shall grant a hardship waiver from the requirements of this article, subject to the limitation in subsection C. below, to any Hotel Employer who demonstrates that

compliance with this article would require the Hotel Employer, in order to avoid bankruptcy or a shutdown of the Hotel Employer’s hotel, to reduce its workforce by more than 20 percent or curtail its Hotel Workers’ total hours by more than 30 percent. The Division shall grant such a hardship waiver only after reviewing a Hotel Employer's financial condition at the Hotel Employer’s expense. A hardship waiver granted under this section shall be valid for no more than one year. A determination by the Division to grant or deny a request for a hardship waiver under this section may be appealed to a hearing examiner in accordance with established city practices for hearing examiner review.

2. Notice of waiver application. Prior to submitting a waiver application pursuant to this section, a Hotel Employer shall provide written notice of the waiver application to all Hotel Workers employed by the

Hotel Employer. Within three days of receiving a waiver determination from the Division under this section, a Hotel Employer shall provide written notice of the determination to all Hotel Workers employed by the Hotel Employer.

3. Applicable minimum wage and health benefits upon granting of a hardship waiver. A Hotel Employer that receives a hardship waiver under this section shall be granted a 12-month delay in providing

any new wage and health benefit increases that occur after the date the completed hardship waiver application is received by the Division. A Hotel Employer granted a waiver must pay a Hotel Worker the minimum wage rate specified in Section 186.02 A.1. and provide the health care benefits specified in Section 186.04 (or the additional wage rate specified in Section 186.02 A.2. if health care benefits are not provided) that are in effect at the time the Hotel Employer submits a waiver application.

C. Waiver by Employee. The Division may waive the health care provisions in Section 186.04 with respect to and at the request of an individual Hotel Worker who is eligible for benefits under Medicare, a health plan through the U.S. Department of Veteran Affairs, or a health plan in which the Hotel Worker’s spouse, domestic partner or parent is a participant or subscriber to another health plan. A Hotel Worker who receives this waiver shall only be entitled to the hourly wage pursuant to Section 186.02 A.1., and an additional wage rate of:

1. $100 per month for a full-time employee as defined by the Affordable Care Act (ACA) and who works at least 30 hours per week or 130 hours per month; or

2. $50 per month for a half-time employee as defined by the ACA and who works less than 30 hours per week or 130 hours per month.

The provisions of this article shall not be construed as limiting any Hotel Worker’s right to obtain relief to which the Hotel Worker may be entitled at law or in equity.

Nothing in this Chapter shall be interpreted or applied so as to create any power or duty in conflict with any federal or State law.

If any provision of this article is found invalid by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect.

(Added by Ord. No. 183,804, Eff. 9/19/15.)

This article is not superseded by any requirement in Article 7 of Chapter XVIII of the Los Angeles Municipal Code.