New Law Signed Affecting Hotels and Lodging

A new state law affecting hotels was signed January 18 in regards to hotel succession, their employees and guest service disruption. S4295/A6246 concerns changes in control of hotels and disruptions of hotel services.

Note that “Hotel” is defined broadly in the legislation as “a hotel, apartment hotel, motel, inn, tourist camp, tourist cabin, tourist home, rooming or boarding house, club, or similar establishment where sleeping accommodations are supplied for pay to transient or permanent guests.”  Because there are no size or revenue requirements in the definition, this bill could potentially affect employers ranging from large hotel chains to small home rental companies. Similarly, “hotel employer” is defined broadly as “any person who owns, controls or operates a hotel, and includes any person or contractor who, in a managerial, supervisory or confidential capacity, employs one or more hotel service employees.”  

This bill, in the case of a change in control, controlling interest, or identity of a hotel, requires the successor hotel employer to offer employment to each eligible hotel service employee, with no reduction of wages or benefits, for a retention period of not less than 90 days. The former hotel employer is required to provide the successor hotel employer with a full list of the identities, wage rates, and classifications of the hotel’s service employees, and notify the employees of their rights under the bill. The successor employer is not allowed to discharge the employees during the retention period, except for a reduction in force in which the employer retains employees on the basis of seniority and experience, and offers to rehire the laid off employees if the positions are subsequently restored. The employer is required, at the end of the retention period, to make a performance evaluation of each retained employee, and offer continued employment if the employee’s performance is satisfactory. The provisions of the bill regarding retention of employees do not
apply if there is a collective bargaining agreement that includes terms and conditions for the discharge or laying off of employees.

The bill also requires a hotel operator to provide notification to third-party vendors and guests of any services disruption within 24 hours of becoming aware of the disruption, and provide guests the 46 right to cancel any agreement for occupancy without penalty.

The bill defines “service disruption” as a situation in which a certain specified condition “substantially affect[s] or is likely to substantially affect a guest’s use of a room or utilization of a hotel service.” Such conditions include (i) certain construction work, (ii) “the unavailability, for a period of 24 hours or more, of any advertised hotel amenity,” (iii) “the unavailability, for a period of 24 hours or more, of any advertised room appliances or technology,” and (iv) “the unavailability of any advertised or legal required accessibility feature.” When such service disruptions occur, the legislation requires that a hotel operator provide, “in all modifiable mediums in which the hotel advertises, solicits customers, or through which customers can book or reserve rooms or services, notification of the service disruption to each third-party vendor and each guest who is seeking, or has entered into, a reservation, booking, or agreement with the hotel operator or a third-party vendor for the use or occupancy of a room.” The legislation also specifies requirements for such notification including what and how it must describe.

The bill further prescribes those certain conditions shall be presumed to substantially affect a guest’s use of a room or utilization of a hotel service. Those instances are: (i) “conditions of which the hotel operator is aware, indicating the presence in the hotel of any infestation by bed bugs, lice or other insects, rodents or other vermin capable of spreading disease or being carried, including on one’s person, if the infestation has not been fully treated by a licensed exterminator within 24 hours of identifying it”; (ii) “the unavailability for a period of 24 hours or more, of any utility, including, but not limited to, gas, water, or electricity when the unavailability affects only the location of the hotel”; (iii) “or any strike, lockout or picketing activity, or other demonstration or event for a calendar day or more at or near the hotel.” Full legislation here