Pending the results of a lawsuit challenging the medical requirements under the Hotel Employees Health and Safety Initiative (“I-124”), the City of Seattle has agreed to delay enforcement of Part 3 of that law. Part 3 requires hotels with 100 or more guest rooms to provide insurance at no greater than 5% of medical costs to certain low wage workers, as defined under I-124. If a low wage employee does not enroll in insurance or pays more than 5% of wages toward insurance costs, the hotel employer is required to provide a healthcare subsidy to the employee.
Initiative 124 (aka I-124), the ballot measure approved by voters in November 2016 that establishes several new purported "safety and health" standards for hotel employees in the city of Seattle, opens the door for unprecedented exposures for Seattle's hotel operators. Since its enactment last December, Initiative 124 has given rise to several questions about how, if at all, insurance policies might respond to allegations under the new law.
In December 2015, the City of Seattle passed the “Wage Theft Prevention and Harmonization Ordinance,” which made changes to all four of Seattle’s labor standards ordinances—Paid Sick and Safe Time (PSST), Minimum Wage, Wage Theft, and Fair Chance Employment.
Across the board, the new law provides harsher penalties for noncompliance than in the past. For example, there is now a rebuttable presumption that an employer has retaliated if it takes adverse action within 90 days of the employee’s exercise of protected rights. An employer in this situation must demonstrate by clear and convincing evidence that the protected activity was not a factor in the decision to take adverse action. Thus, it is essential to carefully document all responses to concerns about employees’ protected rights as well as reasons for adverse employment actions.
Employment Law specialist, Mike Brunet, details a growing trend and how it will impact the Seattle-area hospitality industry.
This week’s topic may appear limited in scope, but is representative of a national and local trend. On April 25, 2011, the Seattle City Council unanimously passed an amendment to the City of Seattle’s municipal code to define and punish “wage theft,” the practice of improperly withholding amounts owed to employees. Seattle thus joins a growing number of jurisdictions, including Miami-Dade County, FL, and the cities of Austin, TX, Denver, CO, Kansas City, KS, and San Francisco, CA in having a specific law in place to combat wage theft. A number of legislators in cities, counties, and states around the nation are considering pending bills that would add to this list. Although the goals of Seattle’s Wage Theft Ordinance may be laudable, the scope of the bill could cause well-meaning employers, including hoteliers and restaurateurs, to unintentionally run afoul of it.
Greg Duff, Editor
Greg Duff founded and chairs GSB’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.