Hotels Want Workers to Share Health Insurance Cost

Staff Reporter

L.A.'s 17 largest hotels, emboldened by the success of the region's three largest supermarket chains' in gaining health care concessions from its workers, now want their 4,000 employees to follow suit.

Employers are demanding that unionized hotel workers begin paying from $5 to $15 per week toward the cost of health coverage, depending on the size of the worker's family. Employers currently pick up the entire tab.

"All the (non-union) employees in the hotel pay a portion of their premiums for health and welfare," said John Stoddard, general manager of the Wilshire Grand and a member of the Los Angeles Hotel Council's negotiations committee.

Negotiators for the Hotel Employees and Restaurant Employees are resisting the proposed benefit cuts, citing workers' slim wages and dependence on fluctuating hotel occupancy levels.

"It's very, very important to us to maintain the family health insurance at the current benefit level and without cost to the workers," said Maria Elena Durazo, president of HERE Local 11. "The wages they make are really critical to sustaining the families. If they go from that to having to pay for their health insurance, you are really pushing them over the edge."

While the negotiating themes are similar, the hotel talks don't as yet appear headed down the same path as the supermarket contract talks, which led to a led to a 4 & #733;-month strike and lockout before workers settled for a contract largely on employers' terms.

For one thing, the hotels do not seek significant labor cost reductions. The 900-room Wilshire Grand has budgeted a 3 percent increase in overall labor costs for 2004, for instance. Also, neither side has threatened a strike or lockout, although HERE has established a strike fund for the first time.

Both parties agreed to an indefinite extension to the six-year contract that expired April 15, with the stipulation that either side may cancel the contract with seven days notice.

Timing issue

Nevertheless, there are tensions.

Union officials are angry that too many employees housekeepers in particular are carrying workloads to make up for about 2,000 layoffs that occurred after the Sept. 11 terrorist attacks.

Local 11 wants those workers hired back and all members given unspecified pay hikes.

"Business has come back a lot faster than employment levels," said Matt O'Malley senior research analyst for Local 11. "We've got too few people doing too much, particularly in the housekeeping department."

What's more, the workers want the improvements wrapped up in a two-year contract with expiration coinciding with HERE master pacts in Boston, New York, Chicago, Toronto and Honolulu. This would give the union leverage against the hotel chains, which have undergone major consolidations in the past two decades.

"Our goal is to line up contract expiration dates," said David Koff, another HERE senior research analyst, noting that the supermarket strike proved that regional locals are no match on their own for multinational employer groups.

"The purpose is to enable the members of our local unions to speak with one voice at one time," he said.

Hotel operators claim that the union's own members want more security than a two-year contract would offer.

"The hotels are not interested in a two-year deal," said Lisa Van Krieken, a partner with San Francisco-based Folger Levin & Kahn LLP and one of the hotels' lead negotiators. "We'd like some stability for both the hotels and our employees with a longer-term contract."

Another point of friction is HERE's piecemeal approach to presenting its demands. Although talks began in earnest in mid-March, the union had yet to represent its wage increase proposal as of late last week.

Durazo acknowledged that she did not anticipate bringing wages into the equation until this week at the earliest.

"The hotels are very frustrated," said Van Krieken. "We asked for a wage proposal (three) weeks ago and they said they didn't have one ready yet. It makes it very difficult to make any progress."

Base hourly wages for employees range from $6 for bellhops (plus tips) and $11.02 for housekeepers, to $11.25 for dishwashers and $15.42 for cooks.

Workers received average pay hikes of nearly 3 percent annually during the previous six years, said Stoddard said.

The negotiating group consists of the Century Plaza, Hyatt Regency Los Angeles, Millennium Biltmore, Park Hyatt Los Angeles at Century City, Regent Beverly Wilshire, Sheraton Universal, St. Regis, Westin Bonaventure and Wilshire Grand hotels.

The other seven hotels in the negotiations have signed "me-too" agreements locking them into the terms ratified by HERE.

For 2004, countywide hotel occupancy is projected to be 70.4 percent in 2004, up from 68.5 percent in 2003 and 67.2 percent in 2002, said Bruce Baltin, senior vice president in charge of the L.A. office of PKF Consulting, a San Francisco-based hospitality consulting firm.

Where They Stand

Hotel workers and employers are far apart in contract talks.

Hotel Operators: Seeking employee contribution of $5 to $15 per week toward the cost of health care. Oppose shortened contract length.

HERE Local 11: Seeks rehiring of some workers laid off after the 9/11 attacks and a lighter workload for remaining employees. Opposes any cuts in health benefits, and wants to align contract expiration with those of other master pacts in major U.S. cities.

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