New York City's Safe Hotels Act is set to come into effect on May 3. It will impose a new $350 licensing fee, which must be renewed every two years, as well as imposing inflexible staffing requirements on the city’s largest hotels. It also will set stronger security and cleaning standards aimed at strengthening safety and health protections for both hotel workers and guests.
Is this a victory for those who wanted improved working conditions or will it create unnecessary restrictions for owners and operators?
What They Said
According to New York Mayor Eric Adams, looking after workers was the key focus:
“Our top priority from day one has been to keep people safe, and that includes protecting workers and tourists at our city’s hotels. That’s why we are expanding protections for the working-class New Yorkers who run our hotels and the guests who use them, he said.
“The Safe Hotels Act ensures that our hotels are safe, healthy, and clean, and that our tourism industry can thrive and create jobs across the city,” Adams continued. “This is a win for working people, the tourism and hotel industry, and all New Yorkers and guests.”
New York City Councilmember Julie Menin, who introduced this legislation, agreed:
“The Safe Hotels Act marks a historic step towards enhancing public safety and ensuring worker protection in the city's hotel and hospitality industry.”
“By signing the Safe Hotels Act into law, New York City joins other major cities in prioritizing the safety and well-being of hotel guests, workers, and surrounding communities,” she added. (New York City is the only major city with a hotel safety law.)
Noting that staffing remains a challenge for hotels, American Hotel & Lodging Association (AHLA) Interim President & CEO Kevin Carey released a statement criticizing the legislation when Adams signed it into law. “Passage of the ‘Safe Hotels Act’ by the City Council caps a legislative scramble and special interest power play that will do irreparable harm to the city’s hotel industry and tourism economy.
Carey suggested that the Act’s passage was in deference to special interests at the expense of small and minority-owned hotels and unfairly and arbitrarily targets hotels with 100 or more rooms with regulations that have nothing to do with the bill’s stated goal of increasing health and safety. “Instead,” he concluded, “this bill will do material damage to the businesses and the tax revenue that hotels generate for the city’s economy and result in higher costs for travelers.”
The Biggest Challenge
To obtain a hotel operations license, an applicant must demonstrate compliance with all of the Act’s mandates, which include safety protocol, and staffing requirements, including direct employment of “Core Staff,” 24/7 front-desk coverage, and mandatory training for human trafficking recognition. Core staff refers to any employee whose job is related to housekeeping, front desk, or front service.
The biggest and most challenging change for many of the larger hotels is the transition to direct hire of Core Staff. This means that hotels with 100 or more rooms can no longer use contractors, subcontractors, or staffing agencies to perform work related to housekeeping, front desk, or front service. All workers who perform such roles must be employed directly by the hotel owner or its management company.
This is especially difficult because hotels have been shorthanded since the pandemic, with an estimated 225,000 labor deficit nationally over the 2019 hotel workforce, according to the American Hotel and Lodging Association (AHLA).
The ban on subcontracting was justified by Assemblyperson Menin and other Assembly sponsors and the politically connected Hotel and Gaming Trades Council (“HTC”) on the basis that employees of subcontractors are frequently exploited, wrote Paul H.Galligan, a partner at the New York City law firm of Seyfarth LLC, in article on the Seyfarth website.
The Act had initially included all hotels in the direct-hire mandate, but through negotiations with industry leaders, the City relented and exempted hotels with fewer than 100 rooms.
It also provides two other limitations on the direct-staffing requirement: staffing contracts executed prior to the law’s effective date may remain in effect if the contracts provide a termination date, and when hotel owners retain a hotel operator, the direct-hire responsibility falls to that entity.
To read the rest of this article, visit our sister site Hospitality Investor.
To learn more about the Safe Hotels Act, attend NYU IHIF for the discussion: New York Spotlight: Examining the impact of the Safe Hotels Act on hospitality. For more information and to register, visit https://www.ihifamericas.com.