There has been a lot of debate lately about unions and if they are still relevant. What recently happened to workers at the Golden Sails Hotel in Long Beach may help sway those who are against unions, understand exactly why unions are still relevant. Last November 64% of voters in Long Beach said “yes” to give workers in the hospitality sector a “living wage.” That includes hotel staff, but the loophole is…only those hotels that have a 100 plus rooms. The exemption was added to help small business owners from any hardship.
So a few days ago the executives at Golden Sails Hotel (which has 170 rooms) posted a letter to their employees telling them that they would start closing rooms and some staff would lose their jobs. Friday morning employees from housekeeping were escorted into a room and told they were fired. No explanation was given. But we all know how big business works. Its all about their bottom line … no matter what. Who cares what the voters of Long Beach think? Golden Sails Hotel is a private business and they are NOT a democracy!
This morning employees who lost their jobs were joined by Unite Here! Local 11, four Long Beach City Council members, and about 100 concerned citizens to tell management that they were not going to accept this decision without a fight. Councilmember Patrick O’Donnell told the crowd, “What the management at Golden Sails is doing is anti-American. Voters passed Measure N and they should honor that.”
Rosa Rivera was fired after working at the hotel for 20 years, “I have never had one single complaint against me and I don’t have a job anymore. They told us they were closing rooms and we were fired. I was offered $1,000 to waive all future claims. As soon as Measure N passed we all got our days cut from five to three days a week. Now they just fired us.”
Long Beach Councilmembers ask to speak with GM Matthew Daniels
Long Beach Councilmembers Patrick O’Donnell, Steve Neal, Al Austin, Suja Lowenthal, and California State Senator Ricardo Lara (D) led the crowd inside the hotel lobby and asked to meet with the general manager, Matthew Daniel but he was mysteriously unavailable. An older employee came to the front counter to listen to councilmember complaints. He was not wearing a nametag so I have no idea who he was. For all we know, he could have been some poor guy off the street that was promised a free nights stay if he would deflect questions and allow Daniels to escape out the back door.
The Golden Sails Hotel seems to be part of a growing trend in the business world. They really do believe that they alone are the ones who make their business successful. They don’t understand that their employees set the tone if a business is a success or not. One person alone cannot do everything and owning a business comes with responsiblities — like treating employees with respect and a living wage. Housekeeping is not an easy job. For those who think its just about making a bed and changing towels are clueless. People are pigs. Thats right I said pigs. I used to work in the hospitality industry and had friends who were chambermaids — the things they told me that they found in these hotel rooms would make your skin crawl. Dealing with the public is a thankless job and working for a company after 20 years and still getting minimum wage adds insult to injury.
Leigh Shelton from Unite Here! organized today’s event and promised to return and start a possible boycott. Councilmembers will look into legislative measures to enforce the law so the “will of the people will ultimately be heard.”
I really don’t understand what goes on in the minds of management when they decide to close 70 rooms in order to be exempt from the new law. That’s 70 rooms at $135 a night (I called) that make them money! Its like they choose to shoot themselves in the foot! I was told that their hotel is nearly full all year round, so they are losing a great deal of revenue, not to mention getting bad publicity by screwing with peoples lives.
How long until the city starts complaining that they are losing bed tax money? Ha!
Unless they are destroying the 70 “closed” rooms, I wonder if legally they still have over 100 rooms.
It would be interesting to see a test of whether, if they ever have 100 rooms booked, they ever do go ahead and fill a 101st room even for a “special guest” or something, causing the “living wage” law to spring into effect — perhaps even retroactively. Rules like this do tend to get bent from time to time — I wonder if this one ever will, “just this once,” by someone on staff. Who knows what sort of person might be watching — and taking notes? Any big events ever take place in Long Beach? (ha ha.)
I conclude from this that either (1) Long Beach’s tourism industry really can’t support the extra 70 rooms, or (2) they have no intention of actually closing the rooms, or (3) some other hotel will book the extra rooms to make up for it and should be willing to hire a commensurate number of staff to make up for them.
Or … maybe the Golden Sails Hotel owners should consider selling the place to someone who IS willing to pay workers a living wage!
Excellent points on 1 through 3 Greg…if those items are not correct and the hotel actually makes money on those rooms, i would replace your last sentence as…
Or…maybe the Golden Sails Hotel owners should consider selling the place to someone who IS willing to make money as you don’t make money in the hotel business without rooms (or employees)!
This is what will happen when the unions are pissing in the bed to stay warm.
How many employees were let go and what the actual per hour cost difference is between those at hotels under 100 and those over?
Does anyone know what their occupancy was prior to this and how many associates were let go? For example, were they only 50% occupied on average so that they were operating as a hotel under 100 rooms when they technically had more? My gut tells me that they probably were either running really low on occupancy, which means they may have been overstaffed to begin with which is a bad business decision in general, or they were not making incrementally enough money on the over rooms over 100 to justify the increased cost which may or may not be able to be passed onto consumers. For example, if their average occupancy was only 110 rooms, it could be quite tough (not impossible, just tougher) to compete. Although, some of the reviews don’t seem to be all that bad, which often means pretty good occupancy.
I am also curious as to why a hotel with under 100 would be exempt under the law…if it is a good thing, it should be a good thing for all. If I own a hotel with 105 rooms and my costs are X% higher than my neighbor who has a hotel of 95 rooms, I have to imagine that it puts my 105 room hotel at a pretty severe disadvantage.
Obviously, paying employees a good wage is important…I have to imagine that the hotels with the best staff, pay them the most, and their patrons are quite loyal and their on-line reviews are excellent…they are also likely to be able to pass a lot of that cost on to the consumer.
I am sure that there is more to the story here…it would not be normal for a businessperson to close down rooms that are making money- maybe they were not making incremental profit on those rooms over 100. Strange. Even worse, it is Christmas time. A time that should find us all doing our best to help others.
This “impartial analysis” of Measure M, from City Attorney Robert E. Shannon, appears at smartvoter.org, at this link:
Ballot states and rebuttals from the Yes and No sides appear there as well.
Thanks for the link and the info…besides the pay info, the item that sticks out to me is that it indicates that a building with 100 or more guest rooms is impacted. It does not say, 100 or more rooms available to be rented, so I too am curious if they are trying to exploit a loophole.
Still don’t think, if it should apply, that it should only apply to hotels with 100 or more rooms…keep an even playing field.
This is a bit off topic… but it does include exemptions from the Obama Care law and treats business differently. Those businesses with less than 50 employees or who has employees working part time are not required to offer health insurance to employees. Why not treat all businesses the same? The reason will be its a financial hardship…but what about the business with 51 employees? Laws alway seem to contain exemptions and what we call — loopholes or they probably wouldn’t pass.
http://www.slate.com/articles/business/small_business/2012/07/nfib_is_wrong_on_obamacare_the_aca_should_actually_help_small_business.html
Yeah, I have questions about the appropriateness of exemptions with Obamacare also.. If it is a financial hardship for a business with 45 FT employees, then it would reason that it is a financial hardship for a business with 90 FT employees. Just because a business employs more people, does not automatically mean that they have money coming out desk drawers trying to figure out what to do with it. The same is true with 100 rooms…I can’t imagine that it is all that surprising that a hotel that may be just getting by financially would do whatever it can to restructure itself in order to comply with the exemption. I would venture to guess that there will be similar restructuring with the 50 EE requirement for Obamacare.
This is why cliff’s are scarey compared to slow gradual phase ins and outs- in the hotel instance for example, it would allow a sliding scale for wages depending on the size of the property versus an all or nothing test at 100 rooms.
The Golden Sails Hotel mirrors Walmart in that employees in both businesses qualify for public assistance. Taxpayers are subsidizing both so the private business can make huge profits.
“I have to imagine that the hotels with the best staff, pay them the most”
It would be great if that were true but not all businesses work that way. It has been my experience that businesses view employees as expendable, especially housekeeping since they too believe its only making beds and changing towels. What people don’t understand is that they have many rooms to clean by a certain time. They are given less than 10 minutes per room to clean it for the next guest. Many guests drag their feet when it comes to checking out and the mess they leave behind is sometimes unbelievable. Its physical, hardwork. Remember one woman has been with them 20 years and NEVER was paid more than minimum wage.
As for finding out how many lost thier jobs, I am looking into it and will get back to you.
Thanks Inge…Businesses with the best employees and are successful in their line of business, often look at their employees as vital and far from being expendable. The problem is possibly in the definition of “the best”…the best is far far above average. I personally have found that it applies even to the entry level, minimum wage workers- the best of them are often moved into a new position which pays more (not always). I don’t know about the women who was there for 20 years, so I can’t comment on whether she was paid more than minimum wage or if she was in the top tier of her profession.
You indicate that private business is making huge profits…we can agree that is true with WalMart. Do you know if it is true for Golden Sails? Hotels are tough business…even those that have good occupancy can have trouble making it, yet alone making huge profits. Curious if there is info about the profitability of this property or if maybe that was just a general statement, more about WalMart and not so much about this specific instance.
*Inge…again we agree. Best Western or whoever is taking over this hotel…does so with the complete “willing cooperation” of the former owners. It works like this: You have a Union problem at your hotel…..just sell it to a buddy. Close it for a few months and repaint a few rooms and then hire a whole new staff……at minimum wage. When the same thing happens to your buddy down the street….you return the favor. You don’t have to be a Saudi Prince to understand what “Oligarchs” are.
I spoke with Leigh Shelton and she told me that the original letter she received from an employee told the staff that everyone would be fired. This letter was posted a few days before the actuall event. Copies were given to city council and a barrage of community activist groups. Management received phone calls from city council and others which (it seems) made management tone down their rhetoric…at least for now. As of last Friday 4 employees were terminated…three in housekeeping and one janitor. So…to answer your question– 4 employees were fired and the hotel will close 70 rooms.
My guess is that more employees will be fired or at least become part time when management thinks the publicity will blow over. The hotel charges $135 per night per room as of today…I don’t know what they charge during the summer season. I am also willing to bet that if the hotel needs the extra rooms, they will re-open them…believing that those employees who remain will not have the courage to turn them in.
Remember, companies break laws all the time because they know employees are too scared to blow the whistle on them.
They should sell a portion of the hotel so both enties will under the 100 person limit.
Nice job citizens of LB – now just try to get another large hotel built in your city – won’t happen – stupid f**kers.
You really, really, really, really, really, really don’t like people working for a living wage, do you?
I am with you Inge – cut the public assistance welfare.
When will the socialists learn that they cannot control everything?
Here is a letter that was given to employees: http://www.lbpost.com/images/greggory/The_memo_sent_to_all_employees_of_the_Best_Western_Golden_Sails_Hotel.jpg
It looks like they are restructuring the company. Old operating entity is terminating all employees and rehiring certain (or “most” per the letter) employees under the new operating entity while also closing down rooms. My gut tells me that the new entity may actually only be operating the <100 room portion of the hotel and the old entity will maintain rights to the other rooms, so as to avoid the 100+ Measure N issue. They do state that occupancy is a problem at the hotel.
What do you want to bet that one or more of those “closed” rooms at least occasionally becomes occupied? The delicate schemes of lawyers and generals often turn to chaos on the ground.
Isn’t there a mandatory reporting window for a mass lay off like this? I want to say 90 days?
Mandatory reporting to whom? I don’t do much with mass layoffs — so far.
Ryan, you are correct in that there often is a notification required. It is the WARN Act which requires 60 days notice I believe but only applies to companies over 100 employees, which my gut tells me this business may not qualify as(??).
*Decent companies follow the 60 day rule. Could be that Federal Law
mandates that number. But then we have that stupid “at will” hiring and firing law……which allows the management to fire anyone for any reason without even telling them. There is no ‘Age Discrimination” any longer. That’s what happens when there are so many old fogies working. They can change Walmart greeters…..over night.
My “bet” would be that the new operating company will not even have control over those closed rooms. The old entity will continue to be in control of them. The new operating entity will likely only have 99 or fewer rooms in order to comply with Measure N and the other rooms will be with the old entity. Occupancy seems to be the key…if they were not occupied, then they close them down to be one of the hotels who don’t have to pay $13/hr (still don’t know why it is only required for hotels over 100…if it is a good thing, it should be a good thing for all).
Darn attorneys! Oh wait…
On the note of it being a good thing . . .
Does it strike anyone else as odd that the city set a wage floor for just one industry? Why should the employees at the car wash next door not be entitled to $13/hr?
Anyway, non sequitur, but I think it’s weird.
I agree Ryan…If it is a good thing for one industry, it should be good for the entire industry. If it is a good thing for the city, it should be a good thing for the entire city. It goes to my overall philosophy of trying to not have gov’t pick winners and losers- in this instance, a hotel with under 100 rooms is treated differently than a hotel with over 100 rooms.
My gut tells me that it maybe has something to do with the ability of the local city gov’t to regulate. Perhaps they can regulate the hotel industry due to occupancy tax (I presume there is such a thing in LB) whereas the ability of the city to mandate a local minimum wage for another industry is not as strong.
I didn’t see this until after I wrote my response. Thanks for posting the letter. The copy I receved is jpeg and I need a magnifying glass to read what it says. The staff I spoke with told me that the hotel is always busy, so it sounds like a “he said– she said” thing to me.
Busy does not always mean profitable- especially in hospitality where pricing is a huge concern. I would be interested to see actual occupancy reports (even more telling would be financials)- which of course, we will not see, due to privacy concerns.
Although there may have only been 4 employees who no longer have a job…I bet that all were initially terminated by the old entity and then rehired by the new entity. The “new” hotel will likely not even have the technical ability to sell the 70 closed rooms as they will be managed by the “old” entity.
Only 4 employees lost their job…unfortunately, that is 4 families whose life has just been shattered along with the further impact that comes with job loss for the community and economy. Although, if they employed lets say 30 people (I have no idea if that is correct or not), and they just terminated 13% of their job force while closing down 41% of the hotel rooms, they may have had some other issues and may indicate that this particular property was not making huge profits.
Notices to a multitude of people and agencies.
100+ employees: http://www.dol.gov/compliance/guide/layoffs.htm
75+ employees or a layoff of 50+: http://www2.calaborfed.org/userfiles/doc/2010/legislative/WARN_Comparison.pdf
Based on the letter (Assuming this place has more than 50 employees . . . maybe it doesn’t), I think these folks are entitled to 60 day notice, which clearly they haven’t had.
Looks like I should read all posts prior to posting…you have it right, WARN is only Fed whereas CA is for those with 75 or more employees laying off 50 or more.
The moral of this story is “don’t mess with the Invisible Hand.”
*Rather reminds us of Mississippi in 1965……when people had Flaming
Crosses land on their front lawns and porches without prior notice. Today, with the Internet….there is no “Invisable Anything”.
Au contraire mes ami! Mr. Smith’s Invisible Hand is always present.