October 17, 2021

Volume XI, Number 290

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October 15, 2021

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October 14, 2021

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NYC Enacts Severance Pay Requirements for Displaced Hotel Workers

Effective as of October 5, 2021, Int. 2397-2021 requires operators of “transient hotels” (as defined by Section 12-10 of the New York City zoning resolutions) to pay their employees severance pay if: (1) the hotel 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 underwent a mass layoff after March 1, 2020 that resulted in the loss of work by at least 75% of employees during any 30-day period. There is an exception for hotels that have closed permanently and are in the process of converting to an alternative use, provided that: (1) the hotel employees were offered severance of at least 20 days’ pay per year of service; and (2) the severance was specifically tied to the conversion.

To be eligible for severance payment, an employee working at a covered transient hotel must have: (a) been employed by the hotel on March 1, 2020 for at least one year; (b) been employed to perform “hotel service” (defined broadly to include any work performed in connection with the operation of a hotel); (c) not been a managerial, supervisory or confidential 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 payments are owed to all such employees beginning on October 11, 2021, for up to 30 weeks in the amount of $500 per week, or up to a total of $15,000. The obligation to provide severance ends when an employee is recalled, or, for a closed hotel, when the hotel reopens to the public and recalls 25% of its employees. Notably, any severance pay provided to a hotel employee prior to October 11, 2021 does not qualify as a set-off towards the obligations to pay severance to hotel employees after October 11, 2021; however, any severance payments made after October 11 will function as a set-off toward the severance pay obligations under this law. The law will expire and be deemed repealed on June 1, 2022.

© 2021 Proskauer Rose LLP. National Law Review, Volume XI, Number 286
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About this Author

Michael J Lebowich, Labor, Employment, Attorney, Proskauer, Law Firm
Partner

Michael Lebowich is a Partner in the Labor & Employment Law Department and co-head of the Labor-Management Relations Group. He represents and counsels employers on a wide range of labor and employment matters, with a particular interest in the field of traditional labor law.

Michael acts as the primary spokesperson in collective bargaining negotiations, regularly handles grievance arbitrations, assists clients in the labor implications of corporate transactions, and counsels clients on union organizing issues, strike preparation and day-to-day contract administration issues. He...

212-969-3217
Steven Porzio Labor & Employment Attorney Proskauer Rose New York, NY
Partner

Steven J. Porzio is a partner in the Labor & Employment Law Department and a member of the Labor-Management Relations Group. Steve assists both unionized and union-free clients with a full range of labor and employee relations matters. He represents employers in contract negotiations, arbitrations, and representation and unfair labor practice cases before the National Labor Relations Board. 

Steve has experience conducting vulnerability assessments and providing management training in union and litigation avoidance, leave management, wage and hour, and hiring and firing...

212-969-3079
Arielle Kobetz, Proskauer Law Firm, Labor and Employment Attorney
Associate

Arielle Kobetz is an associate in the Labor & Employment Law Department. She assists employers in a wide range of areas, including discrimination, wage and hour, and traditional labor.

Prior to joining Proskauer, Arielle served as a law clerk at the New York City Human Resources Administration, Employment Law Unit, where she worked on a variety of employment discrimination and internal employee disciplinary issues. 

212-969-3304
Associate

Rachel Kessler is an associate in the Labor & Employment Department and a member of the Employment Litigation & Arbitration group.

212-969-3158
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