California Supreme Court Denies Hotels’ Appeal of Living Wage Law

Five Hundred to Rally Today at LAX Hilton Calling on Hotels To Forego Further Legal Action or Ballot Fight Industry’s Opposition to Pay Increase Has Already Denied LAX-Area Hotel Workers $4.6 Million in Unpaid Living Wages

Faith and community leaders joined hotel workers in welcoming today’s ruling by the California Supreme Court requiring hotels near LAX to pay their workers a living wage.  When it was enacted last year, the landmark LAX Enhancement Zone Ordinance required LAX hotels to pay the city’s living wage rate of $10.64 an hour ($9.39 for those with employer-provided health benefits) to thousands of hotel workers who work at 13 hotels on the Century Corridor.  That wage is adjusted annually according to the Consumer Price Index to reflect cost-of-living increases.

Coalition for a New Century leaders applauded the Court’s decision saying it would help lift 3,500 hotel workers out of poverty. Hotels on Century Boulevard have already spent hundreds of thousands of dollars fighting the living wage ordinance, and their opposition to the wage law has cost workers millions of dollars. 

According to a recent study released by the Los Angeles Alliance for a New Economy, Century Boulevard hotel workers have lost approximately $4.6 million in unpaid living wages as a result of legal actions that have delayed implementation of the living wage ordinance.  On average, individual workers lost between $350 and $4044 a year, depending on job classification. Revenues for Century Boulevard hotels have increased an estimated $30.1 million—approximately 6 times the additional cost of complying with the ordinance.

“Today’s ruling is a real victory for these hard-working men and women,” said Rev. Anna Olson, Director of Clergy and Laity United for Economic Justice (CLUE), Los Angeles. “We were confident that the California Supreme Court would uphold the living wage ordinance and help thousands of hard-working men and women raise their families with dignity.”

Century Boulevard hotel workers also cheered the Supreme Court’s decision. “This last year has been really difficult for me and my family, we’ve been living paycheck to paycheck,” said Maria Luisa Avalos, a housekeeper at Hilton LAX. “I know that the money I would have received from the living wage could have helped me and my family.”

The LAX Enhancement Zone Ordinance enacted in February 2007 by the L.A. City Council applied the city’s existing living wage rate to thousands of hotel workers who work at 13 hotels on Century Boulevard near Los Angeles International Airport.  Seven LAX hotels challenged this ordinance.  The Los Angeles Superior Court ruled in their favor but the City appealed this ruling to the California Court of Appeal. In December 2007, the State Court of Appeal overturned the lower’s court ruling, thereby upholding the Enhancement Zone Ordinance’s living wage requirement for LAX hotel workers enacted. 

Hotels near LAX enjoy the highest occupancy rates in Los Angeles, yet many workers in these hotels still live in poverty. Hotel workers in the LAX/PCH submarket earn 20% less than their counterparts in downtown L.A. Average annual earnings for LAX/PCH workers is $20,328 – barely above the federal $20,000 federal poverty threshold for a family of four. Some workers qualify for multiple government assistance programs.

The nearby communities of Lennox, Inglewood and Hawthorne, where a large number of these workers live, suffer high rates of poverty, crime and overcrowding. One in four residents in these communities lives below the federal poverty line, a measure of extreme poverty, while more than 40% of children come from poor households. Median household income is 25% lower than in L.A. County as a whole.

For the past two years, the Coalition for a New Century--a coalition of community, civic and faith leaders--has engaged in an effort to address conditions for LAX hotel workers and nearby communities. In February 2006 the coalition presented thousands of signatures to the City Council asking for a comprehensive plan for the area. In April 2006, a blue ribbon commission headed by former Councilmember Ruth Galanter released a report calling for a major effort by city, industry and community leaders to address conditions for workers, communities and the hotel industry near LAX. In December 2006, community leaders from across the city supported hotel workers during a seven-day fast, joining them for daily actions on Century Boulevard.

”Over the past year, the decision to challenge rather than comply with the living wage ordinance has cost workers an estimated $4.6 million,” said Vivian Rothstein, Deputy Director of the Los Angeles Alliance for a New Economy. “The hotel industry in Los Angeles is booming and workers deserve to also share some of that success.”