Ben Boyce


Hotel wage agreement could set Wine Country standard

Posted on August 8, 2013 by Ben Boyce

The community discussion on the Sonoma Hotel project can expect to be more fully informed, thanks to the decision of the City Council to authorize a community and financial impact assessment by a professional consultant.  Following the announcement of a legally binding private agreement between Kenwood Investments and the North Bay Labor Council, the political buzz has been dominated by speculation on the content and significance of this agreement.

In order to dispel the cloud of misinformation that has been swirling around based on the unauthorized release of an early draft of the agreement, I will summarize the contents in plain English so that the public can make an informed judgment based on facts, not rumors.

Briefly, here is a summary of the key provisions in layman’s language.  There are three major features: (#1) Labor Neutrality clause, which places the decision to form a union in the hands of the employees, without intervention by the employer (#2) Local Hire clause, which ensures the jobs go to residents of the region (#3) Living Wage clause, which pegs the wages of the hundred workers at the hotel to the City of Sonoma Living Wage standard.

The Living Wage clause has the additional beneficial effect of incentivizing more full-time workers, since credit is granted toward the living wage rate for provision of healthcare benefits.

The Labor Council negotiators set out to accomplish two primary labor standards goals. First, to set the Hotel’s wage scales to the city of Sonoma Living Wage standard (currently $13.95/hr+ healthcare benefits) as the baseline for all non-tipped wage workers. Secondly, to adopt the emergent regional minimum wage standard of $10/hr (as enacted in San Francisco and San Jose) as the base pay for all tipped workers at the hotel. For reference, the national minimum wage standard for tipped workers is $2.13/hr. The standard practice in the state of California for tipped workers (Servers, Bartenders, Bussers, Bell/Door staff, Concierges and Parking Valets) is to pay the state minimum wage of $8/hr plus gratuities, even in expensive establishments.

This is not a major feature of the total compensation in a four star hotel, such as the proposed Sonoma Hotel, since those tipped positions can earn hundreds of dollars a day in gratuities.  Where setting the example of raising this bar to the $10/hr minimum wage for tipped workers makes a big difference is for Servers, Bussers, etc. in less glamorous establishments where prices are lower and tips much less generous.  A waitress at a Denny’s, where the tips often consist of coins left on the table, would be very grateful for the additional two dollars per hour, since that base pay is the bulk of her compensation.  That’s the example that we intend to set by harmonizing the tipped worker’s minimum wage to the $10/hr Bay Area regional standard rather than the state minimum wage of $8/hr.  That will make a real difference in the quality of life for many workers.

The intent of the proponents of the original Sonoma Living Wage ordinance in 2004 was to set a community standard for compensation that would help lift wage earners out of poverty.  The living wage standard was based on a body of research that calculated what wage rates would be required to support oneself at a modest standard of living without having to resort to public subsidies like food stamps, Section 8 housing, school lunch subsidies, or dependence on county medical charity care.  I would heartily endorse the call for a higher living wage standard, but in the real world, where policy meets the street, we have actual existing statutes on the books, like the Sonoma Living Wage ordinance, that we can use as a reference point to improve real worker’s standard of living.  That is a worthy goal that is within our reach.

The Living Wage ordinance applies directly to wage positions without gratuities, which includes Housekeepers, Janitors, Laundry Staff, Dishwashers, Pool Attendants, Desk Clerks, and Operators.  A major part of the negotiations over the living wage provision consisted of addressing the genuine concerns of the Hotel owners about getting the business on sound financial footing in the first few years of operation.  The Labor Council worked cooperatively with Kenwood Investments to make this deal a win/win: the workers would benefit and the owners could operate profitably during the critical start up years.  This is a significant step above the typically low wages in the hospitality sector and sets a standard for the region that social justice advocates promote as the new norm for the hospitality sector.

I, for one, would certainly regard a Living Wage workplace as a seal of approval when deciding where to spend my vacation dollars and here in the Bay Area I know that many people share that commitment to fair trade and living wages.  I predict that this will be a new trend in the Wine Country hospitality sector that will provide a competitive edge.  Our carefully crafted agreement can serve as a realistic, step-by-step template for how other hospitality-oriented businesses can budget responsibly for a transition to achieving the status of living wage employers. That would be a most welcome development.