Arbitrator Issues Adverse Decision on Starting Wage Rate

The Arbitrator ruled that the hotel industry can pay the starting wage rate to union workers who take new jobs without having worked 12 of the last 24 months

The Office of the Impartial Chairperson recently rejected a claim by the Union that hotels should be prohibited from applying the new hire wage rate to workers with industry experience who were prevented from working because of the pandemic.

The Issue

Our Union’s master contract in New York City – the Industry Wide Agreement (IWA) – starts new employees at 75% of the contract’s wage scale for their first two years on the job, and 85% for years three and four. The decades-old language makes one exception: Any member who "during the twenty-four (24) months prior to his/her employment [at a new union job], was continuously employed for a period of twelve (12) months by an EMPLOYER signatory or party to this Agreement” starts immediately at 100%.

Although our members retained recall rights throughout the pandemic, over the last several years – due to hotel closures and prolonged layoffs arising from the COVID-19 pandemic – many union workers had no recall option and were forced to find a new union job. Case by case, union business agents have been arguing that these union workers should begin at 100% - not 75% - even though they had not worked “12 of the last 24 months” before returning to the industry. We took the position that many of the affected members still had recall rights (and thus, employment) during the critical 24-month period. Additionally, we argued that it was unjust to penalize members who couldn’t work by no fault of their own during the pandemic.

But the hotel industry refused, insisting that the contract language – specifically IWA Article 6 (C)(1) – gives them the right to start these union workers at the 75% starting rate. So, the Union took the case to arbitration.

For members who are unfamiliar with arbitration, it is the powerful mechanism in our contract for resolving disputes and grievances with the hotel and casino industries. When a grievance cannot be resolved by the business agent on the shop floor, our lawyers can take the case to arbitration and the arbitrator – a neutral legal expert who is familiar with our contract, the law, and the work our members do – will issue a legally binding decision.

The Arbitrator Rules in Management’s Favor

After months of briefs and arguments by union and hotel lawyers, on August 23, 2023, the Arbitrator issued a decision. He rejected the Union’s argument. Specifically, the Arbitrator ruled that the contract language was clear and had been unchallenged for decades.

The Arbitrator rejected the Union’s claim that it was unfair to hold members to the strict letter of the contract when they were unable to work because of the pandemic by no fault of their own. He pointed out that the office had rejected “the Hotel industry’s near identical claim that it was unfair to require billions in severance payments when the industry was shuttered due to the pandemic, since the closures which triggered their obligations were beyond their control and not foreseen by the parties when they negotiated the severance provisions.”

Priority with the Hiring Enforcement Office

While our Union is disappointed by the outcome, there is a way to help affected union workers go back to the higher pay rate.

As the Arbitrator stated, the contract is clear – and it cuts both ways. If you have been employed for 12 of the last 24 months in a union position at an IWA hotel, you can be hired at a new union job at 100%. So, as union workers reach one year at their current union position, they can apply for a new union job and begin earning 100% (without having to work four full years).

The Union’s Hiring Enforcement Office will give priority those individuals from closed shops or departments who took a new union position during the pandemic and were hired at 75%. If you’re in interested in interviewing for a new job, you can contact HEO at (212) 245-8100.