The Loews Hotel.

The City of Santa Monica has prosecuted four major cases for minimum wage violations on its path to a $15 minimum wage in 2020, three of which convicted hotels or businesses operating inside them, according to a report at the Oct. 23 City Council meeting.

Working with the Los Angeles County Department of Consumer and Business Affairs (DCBA) Wage Enforcement Unit, the City has ordered the convicted businesses pay a total of $45,000 in penalties and $47,000 in back wages for more than 60 employees.

“It’s clear that there are employers who will not pay their employees the right wage no matter what,” said Chief Deputy City Attorney Yibin Shen, who prosecuted the cases.

The minimum wage is $16.10 for hotels and businesses operating on hotel property, $13.25 for large businesses, and $12 for small businesses, as of July 1, 2018. The hotel wage matches Los Angeles’ minimum wage for hotel workers.

The City’s minimum wage ordinance will increase the wage to $15 per hour by July 1, 2021, and then increase annually by the Consumer Price Index. Paid sick leave mandates began in 2017 and increased in 2018 to a required 72 hours for large businesses and 40 hours for small businesses.

The City Attorney convicted its first employer, a gift shop inside the JW Marriott hotel, under the minimum wage ordinance in November 2017. The owner plead no contest to three misdemeanor counts of failing to pay employees Santa Monica’s minimum wage and for firing an employee who demanded she be paid the minimum wage and was ordered to pay $11,000 in back wages to the affected employees and $3,000 in investigative costs to the City.

“It was clear the employer had no interest in complying with the law,” Shen said. “While education is important, enforcement is essential. No amount of education would have made that employer pay her employees the right wages.”

The second hotel-based business charged was Flowers and Hewes, Inc, a retail store within the Loews Hotel. Loews Hotel itself was also convicted for minimum wage violations, and the two business were ordered in August to pay $12,000 to 23 employees, as well as $9,210 in penalties. Investigators said some employees at the hotel were paid as little as $2.86 per hour.

“It could be that once we prosecuted the first case, other hotel workers saw it and called DCBA, which is our goal,” Shen said. “Publicizing the cases is intended to educate employees to realize, “I have rights.”

In January, Merchants Building Maintenance, LLC, a janitorial and security services company, was charged with failing to pay 36 employees the minimum wage. It agreed to pay $23,000 in restitution for lost wages and $36,000 in penalties.

Despite several minimum wage violations, City staff said outreach to Santa Monica employers and workers regarding the new ordinance has been largely successful. The City partnered with Restaurant Opportunities Center and Korean Immigrant Workers Alliance to educate 3,600 workers on their rights under the ordinance, and engaged with 2,900 businesses through the Lee Andrews Group.

City staff said the most effective way to reach workers was advertising on public transit, such as the Expo Line, Metro’s 720 bus route, and the Big Blue Bus 7. They found that direct mailers were the most effective way of reaching business owners, and sent information about the ordinance to 16,000 businesses.

Online resources were a significant source of information as well, staff said. The City’s minimum wage webpage received 58,982 pageviews, and its video received 7,652 views. Its video explaining the ordinance’s paid sick leave policy, which currently requires 72 hours of paid sick leave for large businesses and 40 hours for small businesses, was viewed 25,759 times.

The City plans to continue sending mailers to businesses, posting on social media, and answering email inquiries regarding the minimum wage. It also plans to take a greater focus on enforcement, and as 2020 approaches, will try to more closely align the city’s different minimum wages.

This article was updated Oct. 31 at 4:45 p.m.

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