Are You a Hotel Service Employee? You May Be Eligible for Severance Pay

Fewer industries have been impacted harder by the COVID-19 pandemic than hotels. After nineteen months of quarantines, stay-at-home orders, and millions of Americans suddenly without a job, travel and hotel customer rates have faced a steep decline. Americans are more hesitant than ever to travel, and a shortage of customers necessarily places millions of jobs in the hotel industry at risk.

For months, those who have been able to keep their positions in the hotel service industry have had to constantly worry about the status of their job, what their family would do if their hotel closed or faced such a shortage of customers that the employer had no choice but to fire workers. However, for those that have lost their jobs, the New York City Council is working to provide some financial relief.

On October 5, 2021, New York City Mayor Bill De Blasio signed Intro. 2397 into law. The legislation, which was sponsored by Council Member Francisco Moya and passed by the New York City Council on September 23, 2021, requires that hotel service employees are required to receive severance play should certain factors be met.

A hotel is required to give severance pay for hotel services employees if: (1) the hotel had 100 or more rooms (2) the hotel closed after March 1, 2020, (3) the hotel has not, by October 11, 2021, recalled 25 percent or more of its employees employed as of March 1, 2020, and (4) the hotel has not reopened to the public by November 1, 2021.

Meanwhile, a hotel service employee is eligible if: (1) the employee was employed on March 1, 2020, (2) as of March 1, 2020, the employee was employed by such hotel for at least one year, (3) the employee was not a managerial, supervisory, or confidential employee and did not exercise control over management of the hotel, and (4) was laid off after March 1, 2020 due to a closure or mass layoff.

Should the above conditions be met, an employer shall provide $500.00 in severance pay for each week after October 11, 2021, that such an employee remains laid off, for up to 30 weeks. The receipt of severance pay shall not affect the right of a covered hotel service employee to be recalled to their previous position. It remains unclear now how the receipt of severance pay affects those collecting unemployment, but relevant information should become more available as those eligible for severance begin to seek it.

This severance does not apply to a hotel that has closed permanently and has converted or is in the process of converting to an alternate use, provided that every covered hotel employee of these hotels is offered severance pay specifically that equals no less than 20 days per year of service at the same rate the employee was paid for days off.

The effects of this legislation are two-fold. First, the legislation should provide almost-immediate relief for thousands of New York City families who have struggled due to the massive layoffs the hotel industry has suffered. While it may not be as sufficient as full-time employment, that financial support could make the difference for families trying to make ends meet. Second, the legislation should inspire major New York City hotels and hotel chains to attempt to reopen to full capacity, potentially returning thousands of New Yorkers to work.

If you or a loved one was employed in the hotel service industry and faced termination due to the COVID-19 pandemic and experience issues obtaining your legally required severance pay, to speak to someone about your potential claim to severance pay, please contact Borrelli & Associates, P.L.L.C.