With the failure last week of a referendum effort to overturn a Los Angeles city ordinance requiring wages for tourism sector workers to increase to $30 an hour by mid-2028, the ordinance has now taken effect.

That means operators of hotels with at least 60 rooms and private-sector companies operating at Los Angeles International Airport had to raise the minimum wages for their workers to $22.50 an hour as of last week, with more annual increases to come. They must also provide health benefits that are at least equivalent to an hourly rate of $7.65 or pay their employees the difference.

Referendum drive launched

In late May, the Los Angeles City Council passed – and Mayor Karen Bass signed – the tourism wage ordinance requiring the minimum wage and health benefit increases. Passage came after an intense lobbying battle, pitting the powerful local hotel employee union against the hotel industry and major airlines.

Within a few days, the Washington D.C.-based American Hotel and Lodging Association, along with Atlanta-based Delta Air Lines and Chicago-based United Airlines, launched a drive to qualify a referendum measure for next June’s ballot. Under a referendum, the ordinance language appears on the ballot for an up-or-down vote. In this case, proponents for the referendum intended to campaign against the ordinance.

Under city rules, referendum supporters had just 30 days from the date of the mayor’s signature to submit the roughly 93,000 valid signatures required to place the measure on the ballot.

Referendum proponents submitted nearly 141,000 signatures, which they believed was a sufficient number to withstand the rigorous signature verification process that would be conducted by the Los Angeles County Recorder/County Clerk’s office on behalf of the city.

Union launches its own counter-campaign

But from the outset, the Unite HERE (Hotel Employees and Restaurant Employees) Local 11 union alleged that the referendum backers were using deceptive tactics to get people to sign the petitions.

“Delta and United Airlines – along with the hotel industry – want to steal wages from workers by erasing this critical law,” said Kurt Petersen, the union local’s co-president. “Let’s call it what it is: grand theft larceny by modern-day robber barons.”

In an unusual move, the union launched a campaign to convince petition signers to subsequently file requests with the city clerk’s office to withdraw their signatures.

According to figures released by the office of the Los Angeles County Recorder/County Clerk, which conducted the signature verification on behalf of the city, more than 117,000 requests for signature withdrawals arrived. Roughly 17,000 of those requests were verified and the signatures withdrawn.

That made the difference as the county clerk’s office determined that 84,000 signatures submitted by referendum backers were valid, 9,000 short of the 93,000 needed.

Referendum campaign responds

After the failure to qualify was announced by the city clerk’s office, the L.A. Alliance for Tourism, Jobs and Progress – the campaign for placing the referendum on the ballot – issued a statement claiming deceptive practices by the union and its allies.

The statement noted that the 17,000-plus signatures that were withdrawn was an unusually high number for a referendum petition drive and referenced that two weeks earlier, the campaign sent a letter to Los Angeles County District Attorney Nathan Hochman alleging criminal conduct with respect to the signature withdrawal effort. As of late last week, the district attorney’s office had not responded to that letter.

In the meantime, the alliance began turning its attention to another potential ballot measure that local business groups have put forward to repeal the city’s gross receipts tax on businesses. That measure has received title and summary from the office of City Attorney Hydee Feldstein-Soto. Supporters are preparing to launch their petition qualification drive.

“The business community will stand strong in fighting back and ensuring Los Angeles can return to being an affordable city to work and live in,” the alliance said in its statement. “The initiative process, with a lower threshold for tax reductions and eliminations, has opened up many avenues by which we can accomplish those goals.”