New York hotels will have to pay their employees millions in severance pay

Hotel owners will have to make one of the largest payments in history after a referee ruling in September.

The New York hotel industry, one of the most affected by the coronavirus pandemic, will now have to pay an amount of 500 million dollars in severance payments and medical insurance to all workers who lost their jobs as a result of the crisis.

Thousands of hotel employees will benefit after an arbitrator issued a ruling last September, where about 75 hotel owners must pay millions of dollars to their employees compensation and benefits such as health insurance, a report revealed. by the Wall Street Journal.

This serious a historic payment and the largest the New York hotel industry would record, and possibly the largest in the entire United States.

The president of labor union Hotel Trades Council (HTC), Rich Maroko agreed with the ruling, adding that the decision is fair for all workers who have been economically affected by the pandemic crisis.

“Continuing medical care in the context of a pandemic is critical. These severance packages are a must for our hotel workers after the federal supplements ended last summer. “ Maroko said in a statement after the news of the ruling broke.

quote obtained from the NY Journal.

As detailed on the union’s website Hotel Trades Council, the arbitrator’s decision determines that hotel owners must pay a additional three-month extension for health care coverage of all those employees who were left without their jobs due to the economic crisis of the coronavirus, guaranteeing the medical attention of all those workers in October, November and December.

In addition to this, the ruling adds that hotel employees will have the right to receive a additional payment every week that will work as an add-on for your unemployment benefits. These payments are qualified as a “Structured settlement”, which should not affect unemployment insurance benefits, as long as the first severance payment is made more than 30 days after the employee’s last day of work, details the Hotel Trades Council website.

The hotel industry: one of the most devastated by the pandemic

With flights paralyzed and no tourism, the hotel industry has seen one of its worst revenue losses in decades. The forecasts for the future are not encouraging for hotels.

A new report published by S&P Global Ratings revealed that the hotel industry will take at least three years to fully recover from the economic crisis that caused and continues to generate the coronavirus pandemic in the United States.

According to the report made by the firm, the pandemic has reduced the demand for business and pleasure trips, which were the main source of income for hotels.

At this time, with an accelerated increase in cases in the United States, the stoppage of flights, the hotel industry – which was beginning to see some visitors – could be shut down completely.

The fall in accommodations has made hotels survive with less than they have, in addition to generating more unemployment, not having the income to support thousands of employees.

With this new ruling, New York hotels will be forced to withdraw a large amount of money to cover payments, which will leave the industry much more affected than it already was by the economic crisis of the pandemic.

You can also read: Hotel industry won’t recover until 2023

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