City Council bill would force hotels to pay severance to laid-off workers

Meant to aid out-of-work employees and spur reopening, law would mandate up to 30 weeks of benefits

Queens Councilman Francisco Moya (iStock, New York City Council)
Queens Councilman Francisco Moya (iStock, New York City Council)

As if New York City hotels have not endured enough during the pandemic, a new bill would put them on the hook for their workers’ severance pay.

Intended to both help out-of-work employees and encourage hotels to reopen, the bill introduced by Queens Councilman Francisco Moya would apply to hotels where at least 75 percent of workers are unemployed or at least half of the rooms are not being rented, according to the New York Daily News.

The bill, which would currently affect approximately 40 hotels, would require owners to pay laid-off workers $500 per week for 15 weeks. After that, their obligation would increase to $1,000 per week for a further 15 weeks, for a potential total of $22,500 per out-of-work employee.

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If passed, the bill would be retroactive to Sept. 6, when federal pandemic unemployment benefits expired.

Among the measure’s backers is the Hotel Trades Council, the union representing the city’s hotel workers, which estimates that nearly 60 percent of hotel employees — or about 30,000 people — are out of work.

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The union’s president cited the need to support workers who have lost income, and suggested the bill would incentivize hotels to reopen rather than pay former employees to stay home.

But Vijay Dandapani, president of the Hotel Association of New York City, said the bill would only serve as a further blow to the city’s lodging industry, which he said has seen its revenues erode by 70 percent during the pandemic.

“Any further burden will actually have the opposite effect and tip more hotels over the edge,” Dandapani told the Daily News.

Moya emphasized the vital role the hotel workforce will play in the city’s economic recovery. New York hotels were decimated during the pandemic as both domestic and international visitors were forced to abandon business and leisure travel. An April study by CBRE predicted that the city’s hotel industry won’t recover to pre-pandemic levels until 2025.

[NYDN] — Holden Walter-Warner