Los Angeles Municipal Code § 186.00 PURPOSE.
SEC. 186.00. PURPOSE.
(Amended by Ord. No. 188,610, Eff. 9/8/25.)
After surviving the devastating impact of the pandemic on tourism in 2020, the hotels around Los Angeles International Airport (LAX) and throughout the City have thrived. Indeed, in 2023, the last full year for which statistics are available, an estimated 49.1 million people traveled to Los Angeles reaching 97 percent of pre-pandemic levels – with hotels reporting an average daily rate and revenue per room that were near record highs. This resulted in 30.2 million room-nights sold in 2023 and a record $40.4 billion worth of economic activity for the year. The number of visitors to the City is only expected to rise in the coming years to more than 70 million by 2030, and is expected to create more than 400,000 new jobs and generate up to an additional billion dollars in tax revenue for the City.
In preparation for upcoming major global events such as the 2026 World Cup and the 2028 Olympics, the City is heavily investing in infrastructure and development projects. LAX is investing $6 billion in an expansion, and Los Angeles is expected to lead the nation in the availability of new hotel rooms.
Though hotel workers are frequently the face of the industry, providing services directly to tourists, the economic benefits from the tourism industry are not evenly distributed to them. Hotel workers often live paycheck to paycheck and are frequently forced to work two or three jobs to provide food and shelter for their families. In many instances, they cannot take time to spend with their children or care for themselves or family when sick. They also rely on the public sector as a provider of social support services and, therefore, the City has an interest in promoting an employment environment that protects government resources. In requiring the payment of a higher minimum wage, this article benefits that interest.
In 2007, the Los Angeles City Council passed a living wage ordinance for workers employed in hotels near LAX, and in 2009 passed an ordinance that raised the wages for airport employees. In recognition of the commensurate need for fair wages for hotel workers throughout the City, the Hotel Worker Minimum Wage Ordinance went into effect in 2014.
The rapid increase in the cost of living in recent years has made income inequality one of the most pressing economic, social and civil rights issues facing Los Angeles. While major events such as the 2026 World Cup and 2028 Olympics will likely result in record profits for employers in the tourism industry, the workers that keep the tourism industry functional, safe, and profitable are left languishing behind. Wages and health benefits have not kept up with steep inflation and the rising cost of living, and workers continue to face persistent wage disparities, worsened by inconsistent benefits. The ill effects of low wages and benefits have had a greater impact on hotel workers because, unlike the LWO which requires employers to provide workers with a healthcare benefit payment, the current Hotel Minimum Wage Ordinance does not. Through this Ordinance, the City seeks to remedy the disparity in how hotel workers are compensated with respect to other tourism workers.
This Ordinance increases the compensation for hotel workers by requiring a higher minimum cash wage and a new minimum health benefit payment. According to a 2023-2024 Berkeley Economic Advising and Research (BEAR) study, more than 40 percent of airport workers and more than 60 percent of hotel workers will receive a wage increase because of this policy, while 15 percent and 35 percent of those respective workers will receive expanded health coverage. Per the BEAR study, the compensation and health benefit improvements contained in this Ordinance will directly and indirectly impact approximately 23,000 hotel workers. These workers are expected to increase their purchase of goods and services, thereby stimulating the economies of the City, County, and neighboring jurisdictions, in turn.
By proceeding incrementally and applying an increased minimum wage to hotel workers at larger hotels, including a hardship waiver for certain affected hotels, the City seeks to promote the health, safety and welfare of thousands of hotel workers by ensuring they receive decent compensation for the work they perform.
