Santa Monica Should Proceed With Caution on Hotel Ordinance

By Michael Genest and Brad Williams

Santa Monica considers itself a leader in protecting workers’ rights, having passed a series of ordinances in recent years which provide new benefits to employees and the unions representing them.

But these workplace benefits can create new workplace costs that result in unintentional harm to the employees they’re intended to help.

Our new report suggests this could be the case should Santa Monica enact a proposed ordinance that would require hotels to provide “panic buttons” to staff in case of sexual harassment and set workload standards for employees.

Our first primary conclusion is that the “panic button” requirement is mostly unnecessary, since most hotels have them or plan to them and their use is becoming a standard in the industry.

Perhaps more concerning were the results of our inquiry on new hotel workload standards.

Santa Monica’s proposed hotel workload provisions follow similar measures enacted in Long Beach and Oakland. (A draft of the Santa Monica ordinance had not been released by the city as of our writing.)

To determine the need for and feasibility of such an ordinance, we interviewed hotel operators in Santa Monica, Long Beach, and Oakland, as well as consulted industry standard data.

Our survey covered approximately half of the city’s non-union hotels, which represent approximately 45 percent of the total hotel rooms in Santa Monica.

The standards would set daily limits on the number and square footage of rooms that may be cleaned by each housekeeper.

Such a requirement would increase staffing costs by anywhere from 32 to 65 percent depending on the hotel -- and that’s in a “best case” scenario where a hotel fully anticipates its staffing needs.

Unfortunately, a significant portion of the negative impacts of the workload standards ordinance would fall on employees.

Under the ordinance, each housekeeper cleaning fewer rooms per shift could consequently see their hours reduced. Some hotel managers in Long Beach reported that they can no longer assign overtime to staff due to the square footage limit.

In many cases, housekeepers rely on overtime to supplement their incomes; thus, the workload standard has the potential to impose a financial hardship.

One of the Santa Monica hotel representatives we interviewed reported that their housekeeper with the least seniority has been with the hotel for over 10 years, while several have been there over 20 years.

The manager’s biggest concern was that they would lose these long-time, hard-to-replace staffers if they had to reduce their hours to less than a full eight-hour shift.

There are longer-term considerations for the city.

Any reduction in hotel valuations resulting from the law could translate into property tax losses of up to $3 million annually.

To the extent that the lowered income discourages new investment, the City would also lose the benefit of new property taxes and increases in Transient Occupancy taxes.

These financial considerations may not be primary concerns for Santa Monica’s progressive City Council. But the Council should pay close attention to the worker-specific impacts of this proposed ordinance.

It would be tragic if a new law intended to make workers more secure instead left them with less income.

The authors are partners at Capitol Matrix Consultants in Sacramento. Their report was prepared for the Hotel Association of Los Angeles. They retained control over the conclusions.