Home Hotel management Severance pay for displaced hotel workers in New York now available

Severance pay for displaced hotel workers in New York now available


As of October 5, 2021, Int. 2397-2021 obliges operators of “transit hotels” (as defined by New York City Zoning Resolutions Section 12-10) to pay their employees severance pay if: (1) the hotel has closed to the public and has not, by October 11, 2021, recalled at least 25% of the number of employees it employed as of March 1 2020 and has not reopened to the public by November 1, 2021; or (2) the hotel suffered a mass layoff after March 1, 2020 which resulted in the loss of work of at least 75% of the employees within a period of 30 days. There is an exception for hotels that have closed permanently and are in the process of converting to another use, provided that: (1) hotel employees are offered severance pay of at least 20 days of salary per year of service; and (2) severance pay was specifically linked to conversion.

To be eligible for severance pay, an employee working in a walkway hotel must have: (a) been employed by the hotel on March 1, 2020 for at least one year; (b) has been employed to perform a “hotel service” (broadly defined to include any work performed in the course of operating a hotel); (c) not be a managerial, supervisory or trusted employee who had the power to exercise control over the management of the hotel; and (d) been laid off after March 1, 2020 due to a closure or mass layoff. Severance benefits are due to all such employees as of October 11, 2021, up to 30 weeks for an amount of $ 500 per week, or up to a total of $ 15,000. The obligation to pay severance pay ends when an employee is recalled or, for a closed hotel, when the hotel reopens to the public and recalls 25% of its employees. In particular, any severance pay paid to a hotel employee before October 11, 2021 does not constitute compensation for the obligations to pay severance pay to hotel employees after October 11, 2021; however, any severance pay paid after October 11 will serve as compensation for severance pay obligations under this Act. The law will expire and be deemed repealed on June 1, 2022.

© 2021 Proskauer Rose srl. Revue nationale de droit, volume XI, number 286

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