Articles Posted in Labor & Employment

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07 January 2020

See how JMBM’s Global Hospitality Group® can help you.

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California hotel owners and independent operators must provide
human trafficking awareness training
California SB 970 went into effect January 1, 2020, requiring California hotel and motel employers to provide at least 20 minutes of prescribed training and education regarding human trafficking awareness to employees who are likely to interact or come into contact with victims of human trafficking.

JMBM’s labor and employment lawyers have represented the hospitality industry for decades and can provide effective training for employees, as well as develop policies and procedures that protect employers who are implementing programs in human trafficking awareness.

Marta Fernandez, a partner in JMBM’s Labor and Employment department and a senior member of JMBM’s Global Hospitality Group®, alerted hotel owners and independent operators of the new law shortly after it was signed by the governor in 2018.

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30 December 2019

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Hotel Lawyer with labor & employment law update for 2020

Several new pieces of California legislation will take effect on the first day of the new year, impacting nearly all employers and how they handle worker classification, discrimination disputes, arbitration agreements, and union organizing. Our round-up will help you determine which key issues may impact you in 2020; contact us to be sure you’re ready for all these upcoming changes.
Use of Independent Contractors Severely Limited as of New Year
On September 18, 2019, California Governor Gavin Newsom signed AB 5 into law, codifying the holding in Dynamex Operations West, Inc. v. Superior Court which severely curtailed when employers may use independent contractors. AB 5 is effective January 1, 2020 and sets forth an “ABC” tests to determine whether workers qualify as independent contractors.

The test examines whether:

  1. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact
  2. The worker performs work that is outside the usual course of the hiring entity’s business
  3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed

The “B” prong is new, and may be particularly problematic for businesses – potentially resulting in misclassification of individuals who were formerly properly classified as independent contractors.

AB 5 codifies a number of exceptions from the ABC test, including but not limited to:

  1. A person or organization licensed by the Department of Insurance;
  2. California licensed physician, surgeon, dentist, podiatrist, psychologist, or veterinarian;
  3. California licensed lawyer, architect, engineer, private investigator, or accountant;
  4. Securities broker-dealer or investment adviser or their agents and representatives registered with the SEC or FINRA or licensed by California;
  5. Direct sales salespeople;
  6. Commercial fishermen.

Workers in these categories are subject to the “Economic Realities” test set forth in Borello & Sons, Inc. v. Dept. of Industrial Relations. In applying the economic realities test, the most significant factor to be considered is whether the person to whom service is rendered (the employer or principal) has control, or the right to control, the worker both as to the work done and the manner and means in which it is performed.

AB 5 also provides for limited exemptions to the ABC test for certain professional services, business-to-business contracts, construction subcontracts, relationships between referral agencies and service providers, and contracts between motor clubs and third parties. When these categories of relationships qualify, they are subject to Borello’s economic realities test.

What this means for you: All businesses using independent contractors should conduct audits and review written independent contracts under the new standards to ensure that workers are properly classified. Misclassification can result in significant penalties, wage and hour liability, EDD and other tax liabilities as well as trigger class action lawsuits.

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17 October 2019
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As of January 1, 2020, California employers will need to comply with a new law which codifies a heightened standard of classifying an individual as an independent contractor. The new law can have significant implications for hospitality industry employers. Marta Fernandez, hotel lawyer and a partner in JMBM’s Labor & Employment department, discusses the new law and what employers can expect.

California limits use of independent contractors,
creating significant liabilities and penalties for California employers

by Marta Fernandez

On September 2019, California Governor Gavin Newsom signed Assembly Bill No. 5 (AB 5) into law, regarding the classification of workers as employees or independent contractors. The new law will have far-reaching effects with respect to employee classification, tax ramifications, and corporate structuring in California.

AB 5 will become effective on January 1, 2020.

On the most basic level, the law codifies the heightened standard of classifying an individual as an independent contractor and will affect employer costs with respect to Social Security and Medicare taxes, unemployment and disability insurance, workers’ compensation costs and coverage, sick leave, minimum wage, overtime, and rest breaks and meal periods.

The new law codifies the “ABC” test for determining independent contractor status, which was adopted as the default classification test by the California Supreme Court in its 2018 decision in Dynamex Operations West, Inc. v. Superior Court. CONTINUE READING →

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21 February 2019

Voters in Long Beach, California passed an initiative in November 2018 that affects all hotels in Long Beach with more than 50 hotel rooms. The Hotel Workplace Requirements and Restrictions Initiative Ordinance, known as the “Panic Button Initiative” places new requirements and restrictions on hotel owners and puts non-union hotels at a disadvantage.

Marta Fernandez, Hotel Lawyer and a partner in JMBM’s Labor & Employment department, discusses “Panic Buttons” and the new ordinance below and describes what Long Beach hotels should do to prepare for compliance and potential union organizing.
What hotel owners need to know about unions and
the “Panic Button” ordinance in Long Beach, CA
by
Marta M. Fernandez, Hotel Lawyer and Labor & Employment Partner
Passed by voters last November, the “Panic Button Initiative” – which was placed on the local ballot after the hotel workers union submitted 46,000 signatures to the City Clerk in Long Beach, California – has become a new chapter in the City of Long Beach Municipal Code, titled “Hotel Working Conditions.”

The new code mandates that all hotels with 50+ rooms in Long Beach, California must

  • Provide panic buttons for workers to protect them against sexual assault
  • Require notices regarding the use of panic buttons to be posted in guest rooms
  • Give workers who are assaulted the right to reassignment and paid time off for reporting and consultation

Unrelated to potential assaults on hotel housekeepers, the ordinance also requires hotels to

  • Place limits on overtime and make overtime voluntary
  • Limit the amount of space that housekeepers can clean per shift
  • Keep certain records relating to the above

Why the hotel union spent resources on an initiative that does not apply to union hotels

The Panic Button Initiative (also known as Measure WW) tellingly included a significant carve-out for unionized hotels – all provisions of the new ordinance may be waived for union hotels through the collective bargaining process.

Under the guise of protecting workers, the ordinance gives an unfair advantage to union hotels in Long Beach. CONTINUE READING →

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15 February 2019

$87 billion in hotel transactions involving more than 3,900 properties
LOS ANGELES—The hotel lawyers of JMBM’s Global Hospitality Group® are pleased to present their updated Hospitality Credentials, which include clients and projects that represent more than $87 billion in hotel transaction experience involving more than 3,900 properties worldwide – more than any other law firm.

“If you are a hotel owner, developer, or capital provider, our hospitality lawyers can provide expertise and experience you just won’t find elsewhere,” said Jim Butler, Chairman of JMBM’s Global Hospitality Group. “Whether you are buying or selling a hotel, developing a new one, need a privacy and cybersecurity plan, or defend an ADA lawsuit – we have lawyers who know the ropes, and can guide you every step of the way.”

JMBM’s Global Hospitality Group provides a full range of services to the hospitality industry including:

  • ADA compliance & defense
  • Cannabis
  • Celebrity chef agreements
  • Construction
  • Corporate governance
  • Cybersecurity
  • Data privacy
  • Development
  • Equity & joint ventures
  • Expert witness
  • Fiduciary duty
  • Financing
  • Foreign investment
  • Franchise & licensing
  • Hotel-specific contracts
  • Labor & employment
  • Land use & environmental
  • Leasing
  • Litigation
  • Management agreements
  • Mergers & Acquisitions
  • Opportunity Zone
  • Proposition 65
  • Purchase & sale
  • Shareholder disputes
  • Tax
  • Trademark & copyright
  • Trusts and estates
  • Union negotiations
  • Union prevention
  • Vacation ownership
  • Workouts, bankruptcies & receiverships
“Exceeding $87 billion in hotel transactions involving 3,900 properties is a new milestone, and one I am proud to announce,” said Butler. “I am grateful to all of our wonderful hospitality clients who have shown us their trust and confidence over the years and continue to provide us with challenging and meaningful work.”

About JMBM’s Global Hospitality Group
JMBM’s Global Hospitality Group is the premier hospitality practice in a full-service law firm and the most experienced legal and advisory team in the industry. The Group publishes the Hotel Law Blog and hosts the annual Meet the Money® National Hotel Finance & Investment Conference (May 6-9, 2019 in Los Angeles). For more information visit www.HotelLawyer.com.

Contact:

Jim Butler
jbutler@jmbm.com
+1 310-201-3526

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11 October 2018

Starting in January 2020, California hotels and motels must provide human trafficking awareness training to their employees, to ensure that those most likely to come into contact with victims of trafficking are able to help in a way that is effective and safe for both guests and employees.

Marta Fernandez, a partner in JMBM’s Labor & Employment department, outlines the new law below and discusses what hotels should do to prepare for compliance.
Legislative Update: California hotels soon will be required to provide human trafficking awareness training to employees
by
Marta Fernandez
On September 27, 2018, California Governor Jerry Brown signed SB 970 requiring California hotel and motel employers to provide “human trafficking awareness” training and education to employees.

Effective January 1, 2020, hotel and motel employers must provide at least 20 minutes of training to certain employees every 2 years; newly hired employees must receive training within 6 months of their hire dates.

Employees required to receive the training are those who are likely to interact or come into contact with victims of human trafficking including, but not limited to: employees who work in the reception area, perform housekeeping duties, help customers in moving their possessions, or drive customers.

Why the hospitality industry is singled out

While we might read reports of sex trafficking at hotels during events like the Super Bowl, the sad reality is that human trafficking takes place at hotels and motels year round. It takes place in all segments of hotels – economy to luxury – and in all geographic areas. CONTINUE READING →

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12 December 2017

California has enacted a number of new regulations related to labor and employment that go into effect when 2018 begins. Hotels owners and developers with properties in California need to be aware of how these rules apply to their workforce so they can meet their legal obligations and remain in compliance with the law. A round-up of upcoming changes, written by the JMBM Labor & Employment group, is below.
California Labor & Employment Law Update: Key Changes in 2017 and What’s Slated For 2018
by
The JMBM Labor & Employment Group
The legal landscape for California employers continues to evolve at the state and local level – ranging from prohibitions on inquiries into an applicant’s salary and conviction history, additional sexual harassment training requirements, to new immigration obligations.  The following is a high-level summary of the most significant changes in state and local labor and employment laws, which go into effect on January 1, 2018, unless otherwise noted.

EXPANDING POWERS OF THE DEPARTMENT OF LABOR STANDARDS (DLSE)

DLSE can now independently commence investigations; petition for injunctive relief; and issue citations for suspected discrimination or retaliation based on a wage claim (SB 306). 

The DLSE has new powers starting January 1, 2018. With SB 306, the DLSE will now be authorized to commence an investigation of an employer, with or without a complaint being filed, when specified retaliation or discrimination is suspected during the course of DSLE investigations. The new law also authorizes the DLSE to petition a superior court for immediate injunctive relief based on a finding of reasonable cause. Such relief can include a court order that the employer reinstate employment or otherwise reverse its alleged retaliatory action against the employee. This is a huge departure from existing law which does not allow for the DLSE to seek this type of relief during an investigation.

The new law also authorizes the DLSE to issue citations directing specific relief to persons determined to be responsible for violations.  The law establishes review procedures, including procedures for requesting a hearing before a hearing officer, and for a petition for a writ of mandate.  The law subjects an employer who willfully refuses to comply with a final order to civil penalties payable to the affected employee.  The law also allows employees to seek injunctive relief in court.

Contractors can now be directly liable for wage claims against subcontractors (AB 1701).

On or after January 1, 2018, a direct contractor which undertakes a contract in the state for “the erection, construction, alteration, or repair of a building, structure, or other work,” must assume, and be liable for, specified debt owed to a wage claimant that is incurred by a subcontractor, at any tier.  The DLSE is authorized to bring an action to enforce this liability.  It authorizes private civil actions to enforce the liability against a direct contractor.  The new law does not apply to any work being done by an employee of the state or any political subdivision of the state.  It requires a subcontractor, upon request from the direct contractor, to provide specified information regarding the subcontractor’s and third party’s work on the project and allows the direct to withhold disputed sums upon the subcontractor’s failure to provide the requested information. CONTINUE READING →

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10 November 2013

Hotel Lawyer with some tips for employers on handling tipping — the new IRS Rules.

Employer practices with tips at hotels and restaurants have spawned a lot of employee discontent, class actions and other litigation. Some employers have withheld all or a portion of employee tips to cover administrative costs and others have redistributed tips amongst employees, some of whom (like bus staff and kitchen crews) have no opportunity to earn tips. Even the IRS has gotten into the game by adopting new rules that go into effect in January 2014.

The latest development centers around the common practice for restaurants, hotels, and others in the hospitality industry to impose “mandatory gratuities” to large parties of patrons. (We’re all familiar with those menus that read, “A gratuity of 18% will be charged for parties over 6.”) While there may be legitimate reasons for this practice, the potential liability for mishandling automatic gratuities is significant, and about to get much bigger.

Plaintiffs have been fairly successful in arguing that such mandatory gratuities or service charges are compensation for employees, all of which must be paid to the employees, which may not be distributed to non-tipable employees, and are probably subject to employer reporting and withholding taxes, and are part of employees’ regular rates of pay for overtime calculation purposes.

But now the IRS is promulgating some rules that go into effect in 2014, and all employers should pay attention. My partner, hospitality employment lawyer Travis Gemoets, gives us the full story.

Change in IRS Rules on “Automatic Tipping”
Raises a red flag for hotels & restaurants

by
Travis Gemoets

One of the many new laws going into effect in 2014 will require hotels, restaurants and other employers in the hospitality industry to change their current practice when employees are paid “automatic” tips charged to large groups of patrons. This ruling will not only effect tax withholding, but also require employers to make additional overtime payments to the employees, above and beyond the automatic tip charged to the customer.

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17 July 2012

Click here for the latest articles on Data Technology, Privacy & Security.

Hotels and restaurants are among many other businesses that monitor employees at work through video surveillance, and through employees’ use of company-issued computers and smart phones. While employers gain benefits such as reducing theft, decreasing liability and ensuring safety procedures are followed, employees can feel that this electronic monitoring violates their privacy. In his article below, Mark Adams, a litigator in JMBM’s Global Hospitality Group®, shares with us how courts are ruling in lawsuits that deal with electronic surveillance of employees. He also gives employers advice on how to prevent these lawsuits from happening.

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23 April 2012

Hotel Lawyer with some insights on the recent California Supreme Court Case, Brinker v. Superior Court

Last week, the California Supreme Court gave employers a “break” by resolving issues in a case that has been pending since 2008 — issues that have cost California employers more than a billion dollars in settling and defending class action lawsuits.

At issue in Brinker Restaurant Corporation v. Superior Court was whether California employers must ensure that their employees actually take their meal and rest periods or merely make them available. To the collective relief of California employers, the court found that an employer must only provide meal and rest periods to its employees, leaving the employees free to use the period for whatever purpose they desire. The employer is not obligated to ensure no work is performed during the period.

My partner, labor and employment lawyer Travis Gemoets, offers some practical pointers to employers based on the Brinker decision, in his article below.

While it is always great to share positive news with our friends in the hospitality industry, the Brinker decision also reminds us of the critical need for clear, sound employee policies, and the importance of providing regular, ongoing education to supervisors who implement those policies.

JMBM’s Global Hospitality Group® includes labor and employment lawyers with deep experience in the hospitality industry, providing clients with practical advice and planning, as well as aggressive advocacy. If you would like to discuss how our industry-specific prevention and preparedness strategies can help you avoid or minimize costly employment claims, or how the Brinker decision impacts your hotel operation, please contact me or my partner, Travis Gemoets.

CONTINUE READING →

Contact Information
Jim Butler, Chairman
Global Hospitality Group®
Jeffer Mangels Butler & Mitchell LLP
(310) 201-3526 • jbutler@jmbm.com
www.HotelLawyer.com

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