Will Many Hotel Workers Benefit from City’s ‘Economic Lifeline?’

Nicole Palacios, a former front-desk employee at the Park Lane New York, is dressed elegantly in a black pantsuit on a recent crisp New York morning. She is headed to her first job interview at another hotel since being laid off during the COVID-19 pandemic. The 45-year-old has held off on pursuing other job opportunities in the hopes that she would return to work at the Park Lane. “I’m just tired of this roller coaster ride,” she said.

Since federal unemployment benefits ended on Labor Day, Palacios’ patience has waned. The Ohio-born hotel worker was receiving $700 a week in pandemic relief funds, but at the Park Lane, she worked 35 hours a week, making $38 an hour, or more than $1,300 a week — a typical salary for a member of the Hotel Trades Council, a union she’s been part of since 2009.

Palacios was employed through the first few months of the pandemic, while many others opted for a buyout. Every workday for eight months, she would commute from her home in Elizabeth, N.J., to the hotel on Central Park South, which was hosting doctors and nurses from out of town. She was laid off last November.

Last month, Palacios heard from her union representative, who told her that she would be re-hired at the Park Lane on an “as-needed” basis. She was asked to fill in for a co-worker while that person went on vacation. She declined.

“I have girlfriends at the front desk calling me and telling me that they’re working overtime,” she said. “The hotel would rather pay people $60 an hour to work overtime than hire one of us back.”

Palacios is also frustrated because she recently heard, through an unofficial Facebook group of union members, about a new city bill for unemployed hotel workers. She was disappointed that the Hotel Trades Council didn’t contact her directly.

Nicole Palacios, walking past Times Square to her first job interview since the pandemic. (Photo: Karina Tsui)

The bill, signed by Mayor Bill de Blasio on Oct. 5, requires hotels that have laid off 75% of their workforce to re-hire 25% of their staff. If they don’t, hotel owners will have to pay all unemployed workers $500 a week in severance, for up to 30 weeks. 

The legislation, sponsored by Council Member Francisco Moya who represents the 21st District in northwest Queens, applies to roughly 40 hotels with over 100 rooms. These properties had until Oct. 11 to hire the required number of workers back. Hotels that were shut during the pandemic will be pushed to reopen or pay workers severance by Nov. 1.

“This legislation is not only providing our city’s greatest ambassadors with a much-needed economic lifeline,” said Councilman Moya at the bill’s signing at City Hall on Oct. 5. “We are also protecting the livelihoods of families and revitalizing New York City’s hotel industry.”

Palacios struggled to make sense of what she was eligible for under the legislation and didn’t know whether she would receive the severance package. With hotels across New York City hovering between 50% and 60% occupancy, according to the Hotel Association, and soon to enter the winter months –– traditionally weak periods for New York City’s hospitality industry, she had questions about how the bill would apply to part-time or seasonal workers — jobs that many of her friends reluctantly settled for.

“If you go to work, get laid off again, then go back to work again, how can you get your severance money?” she said. Palacios has still not heard back from her job interview.

Miguel Ramos, 45, found himself in a similar position. He had been working full time for nine months at the Hotel Pennsylvania opposite Penn Station, when he was laid off in March 2020 due to the pandemic. A month later, Hotel Pennsylvania announced its permanent closure. The historic 2,200-room building will soon be demolished and replaced with an office building spanning 61 floors.

Ramos has worked in the industry since 1997 and has been part of the Hotel Trades Council for just as long. After losing his job, he discovered that he didn’t qualify for the hotel’s bridge or buyout payments. To this day, he doesn’t know why. The Hotel Trades Council did not respond to Labor New York’s request for comment.

When Ramos found out about the severance bill, he studied the details and saw that he wouldn’t receive any benefits, which, under the law, are reserved for employees who worked at least a year at a shuttered hotel.

“I’m a third-generation union member,” he said. “I have been to labor rallies as a delegate as well as a regular layperson. I have been a proponent and a supporter of union jobs and the labor movement. I just feel like I should get what I deserve.”

The Queens native has spent the past year and a half searching for a union job while taking care of his father, who developed Alzheimer’s at the cusp of the pandemic. “I just scrounged up money to pay for COBRA this week,” he said.

“I have been a supporter of the labor movement…I should get what I deserve,” said Miguel Ramos. (Photo: Karina Tsui)

A few days after the bill passed, the Hotel Association, an organization representing hundreds of hotels across New York City, sued the city, saying that the legislation supersedes laws on employee benefit plans. 

In an interview with Labor New York, Vijay Dandapani, president of the association, said that the bill was “financially coercive” and a “punitive” way to push hotels to reopen. “A forced opening of large hotels will dilute citywide occupancies further and cause other hotels to lay off staff.” The city has until December 2 to respond to the pleading. 

Some other experts worry that the bill will affect investors. “It’s a disincentive for real-estate investors to invest in the hospitality industry,” said David Sherwyn, a law professor at Cornell University’s School of Hotel Administration. Sherwyn adds that hotels, particularly within urban areas, will take a while to reach pre-pandemic occupancy rates and believes that the bill could further damage hotels and workers’ job security.

“If there’s a new variant of COVID-19, you’re going to see owners either shut down hotels, deal with the severance once but then instead of starting up again, they’ll redeploy the asset,” he said, citing the increasing inventory through Airbnb.

Since the law was enacted, more than a third of the closed union hotels announced re-openings and re-hires, according to the Hotel Trades Council website. The New York Hilton Midtown, the largest hotel in the city, is among the handful of hotels that have opened since closing 18 months ago. Though the property has hired 30% of staff back, business appears to be slow.

Recently, coinciding with the reopening of international borders, Governor Kathy Hochul announced a $450 million stimulus package aimed at revitalizing the city’s tourism industry. $100 million will be devoted to as many as 36,000 hospitality workers, each receiving a one-time payment of $2750 from the New York State Department of Labor. 

Another $100 million of the stimulus will go towards supporting tourism businesses that suffered job and revenue losses to rehire workers. These businesses will be eligible for grants of up to $5000 per net full-time employee or $2500 per net new part time employee, so long as employers maintain employment increases over six months. 

A search on shows that there are currently over 2,000 jobs available to hotel workers within 25 miles of New York. The average starting salary is $20 an hour — the highest is roughly $32.

“No one knows the answer to why there is still a labor shortage,” Sherwyn said. “But child care and the lack thereof is a problem for filling a lot of jobs.” He also suspects that many workers who used to commute into the city might be reluctant to take mass transit or work on the front lines. Others might feel hesitant to get vaccinated.

Having worked across departments like security and housekeeping, Ramos felt confident about landing another job at a hotel. Instead, he has struggled. As his father’s primary caretaker, Ramos wants a job that would offer him stability and flexibility.

“People are now realizing how liquid the hospitality industry is in New York City,” he said. “It was like you had a jug of premium liquor to sell and somebody just took the cork at the bottom of it and threw it away. All that profit went down the drain.”

“I have saved up enough to be able to maintain the bare minimum until about the end of the year,” Ramos added. “After that, hard decisions will be made.” What might that mean? Ramos is considering switching industries after nearly 25 years in the business.