City Council
Report
City Council Meeting: June 9, 2026
Agenda Item: 10.A
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To: Mayor and City Council
From: Heidi Von Tongeln, City Attorney, City Attorney's Office, Administration Subject: Introduction and Adoption of an Emergency Ordinance Amending Chapter
4.63, Hotel Worker Living Wage Related to Regional Alignment for Wages and Health Benefits and Introduction for First Reading an Ordinance Amending Chapter 4.63, Hotel Worker Minimum Wage, Related to Regional Alignment for Wages and Health Benefits
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Sections 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines; and
2. Introduce and Adopt an Emergency Ordinance Amending Chapter 4.63, Hotel Worker Living Wage Related to Regional Alignment for Wages and Health Benefits; and
3. Introduce for First Reading an Ordinance Amending Chapter 4.63, Hotel Worker Minimum Wage, Related to Regional Alignment for Wages and Health Benefits.
Executive Summary
In 2016, Santa Monica took actions to adopt a Hotel Worker Minimum Wage Ordinance, which was structured to achieve a regional wage alignment by matching the City’s hourly wage set for hotel workers with the wage established for hotel workers in the City of Los Angeles.
More recently, on May 26, 2026, the City of Los Angeles adopted Ordinance Number 188944, revising wage and health benefit provisions for hotel workers in the City of Los Angeles that are set to take effect on July 1, 2026. Through that change, Los Angeles restructured the relationship between wages and health care, such that hotels in Los Angeles which do not provide a defined level of health care benefits will be required to 2 of 8
provide workers with an additional, separate hourly amount, on top of the required minimum base wage rate.
Santa Monica’s current ordinance does not cleanly account for the new wage-andbenefit interaction, with our local regulation requiring only that Santa Monica’s hotel worker wages be set to “match the hourly wage set for Hotel Workers in the City of Los Angeles.” Also of note, Los Angeles has defined a covered “Hotel” as a property with 60 or more guest rooms, which has the effect of exempting smaller properties from the increased hotel worker wage rate, leaving those hotels with less than 60 rooms subject only to the City of Los Angeles’ general minimum wage. These factors create an internal inconsistency that needs to be resolved, with key considerations as follows:
• Should the City adopt an updated hotel worker wage schedule, which tracks expressly with future Los Angeles related increases?
• Should the City adopt the same health care benefit-or-pay structure, in alignment with Los Angeles guidelines?
• Should the City adopt the 60-room threshold exempting smaller hotel properties from the specific hotel worker wage schedule?
Given that the intention behind Santa Monica’s original adoption of our Hotel Worker Minimum Wage Ordinance was to algin our local wage requirements with that being required in the City of Los Angeles, and the most recent changes in the City of Los Angeles are set to take effect on July 1, 2026, both an Emergency Ordinance and a regular Ordinance to amend Chapter 4.63 of the Santa Monica Municipal Code have been prepared for City Council consideration. If adopted, the set of Ordinances would allow for the City to, effective July 1, 2026, align our local hotel worker wage schedule, the health care benefit-or-pay structure, and the 60-room threshold with what was recently adopted by the City of Los Angeles.
Alternatively, the City Council can also provide alternate direction to adjust how or if Santa Monica should couple our hotel worker compensation requirements with Los Angeles.
Discussion
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The City of Santa Monica, host to millions of visitors annually, has a long history of supporting its tourism and hospitality industries, as well as supporting the wellbeing and rights of workers in those establishments.
For example, on January 26, 2016, the City Council adopted Ordinance Number 2509 (CCS), adding Santa Monica Municipal Code Chapters 4.62, requiring a minimum wage for employees, Chapter 4.63, requiring a living wage for hotel workers, and Chapter
4.65, Living Wage, requiring a living wage for certain City contractors. On May 10, 2016, the City Council adopted Ordinance Number 2515 (CCS), which, in part amended portions of Chapter 4.63 to provide for regional wage alignment by matching the hourly wage set for hotel workers in the City of Los Angeles, and required notice to employees related to one-year waivers for certain hotels as contemplated under Santa Monica Municipal Code Section 4.63.020.
Ordinance 2515 included a change to Santa Monica Municipal Code Section
4.36.015(b)(2), which now provides that: “On July 1, 2017, and annually thereafter, the hourly wage shall match the hourly wage set for Hotel Workers in the City of Los Angeles.”
Although Ordinance 2515 implemented regional alignment with respect to hotel worker living wages, one notable distinction between Santa Monica Municipal Code Chapter
4.63 and the Los Angeles Citywide Hotel Worker Minimum Wage Ordinance is that a “hotel” under the City of Los Angeles’s ordinance is any hotel with at least 60 guest rooms, and a “hotel” under Santa Monica Municipal Code Chapter 4.63 is any hotel regardless of size.
On May 26, 2026, the City of Los Angeles adopted Ordinance Number 188944 revising wage and health benefit provisions for hotel workers in the City of Los Angeles set to take effect on July 1, 2026. Specifically, Ordinance Number 188944 sets forth a schedule for wages to increase to $30/hour by July 1, 2030, as follows:
• Beginning on July 1, 2025: $22.50 per hour.
• Beginning on July 1, 2026: $25.00 per hour.
• Beginning on July 1, 2027: $25.50 per hour.
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• Beginning on July 1, 2028: $28.50 per hour.
• Beginning on July 1, 2029: $29.00 per hour.
• Beginning on January 1, 2030: $30.00 per hour.
In addition, the recently adopted City of Los Angeles ordinance, beginning on July 1, 2030, and annually thereafter on July 1, states the hourly wage rate for a Hotel Worker shall be adjusted higher by a percentage equal to the percentage increase, if any, in the Bureau of Labor Statistics Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Los Angeles metropolitan area, as measured from January to December of the preceding year.
Ordinance Number 188944 further provides that the minimum wages stated above apply to hotel employers who pay at least the following amounts toward the provision of health care benefits for a hotel worker:
(1) Beginning July 1, 2026: $4.25 per hour;
(2) Beginning July 1, 2027: $6.00 per hour;
(3) Beginning July 1, 2028: $8.35 per hour as adjusted by a percentage equal to the percentage increase, if any, in the California Department of Managed Healthcare's Large Group Aggregate Rates (LGAR) report, as measured from January to December of the preceding year. The DAA [Department of Public Works, Bureau of Contract Administration] shall announce the adjusted rate on April 1, 2028, or within two weeks of the release of the prior year’s LGAR report, whichever is later, and publish a bulletin announcing the adjusted rate, which shall take effect on July 1, 2028. (4) Beginning on July 1, 2029, and annually thereafter each July 1, the health care benefits payment shall be adjusted higher by a percentage equal to the percentage increase, if any, in the California Department of Managed Healthcare's Large Group Aggregate Rates (LGAR) report, as measured from January to December of the preceding year. The DAA shall announce the adjusted rates annually each April 1st, or within two weeks of the release of the prior year’s LGAR report, whichever is later, and publish a bulletin announcing the adjusted rates, which shall take effect on July 1st of each year.
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If a hotel employer does not provide a hotel worker with health benefits in the amounts stated above, Ordinance Number 188994 provides that the hotel worker shall be paid the applicable wage rate plus an additional wage equal to the health benefit payment in effect.
Santa Monica Municipal Code Chapter 4.63 does not cleanly account for the new wageand-health benefit interaction that is scheduled to take effect on July 1, 2026, and it does not contain an exemption for smaller hotels, as the City of Los Angeles’s ordinance does. This creates an inconsistency in Santa Monica that needs to be clarified and resolved, with key considerations as follows:
• Should the City adopt an updated hotel worker wage schedule, which expressly tracks future rate increases in Los Angeles?
o Expressly adopting a rate schedule for the next several years that matches the City of Los Angeles schedule would provide advance notice to hotel businesses rate changes for years into the future and while ensuring regional consistency if the City of Los Angeles does not amend its wage increase schedule in the future. If the City of Los Angeles does change the wage increase schedule, the wage rate in Santa Monica will not match unless the Santa Monica ordinance is also amended. • Should the City adopt the same health care benefit-or-added wage structure, in alignment with Los Angeles ordinance?
o Requiring Santa Monica hotel employers to provide health benefits or pay an additional amount toward wages would promote regional consistency in wage rates and benefits for hotel workers and would increase the effective minimum wage rate by at least $4.25 per hour beginning July 1, 2026. • Should the City adopt the 60-room threshold exempting smaller hotel properties from the specific hotel worker wage schedule?
o There are 41 hotels in Santa Monica. 16 have fewer than 60 guest rooms, and of those 13 have fewer than 40 guest rooms.
o A chart outlining the hotels located in the City and the room count for each hotel is included below.
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Address Coastal / Non-Coastal Type Rooms
2001 Ocean Avenue Santa Monica Coastal Zone Hotel 45
220 California Avenue Santa Monica Coastal Zone Hotel 36 101 Wilshire Boulevard Santa Monica Coastal Zone Hotel 302 1707 4th Street Santa Monica Coastal Zone Hotel 253
1434 2nd Street Santa Monica Coastal Zone Hostel 260
201 Broadway Santa Monica Coastal Zone Hotel 97
1910 Ocean Avenue Santa Monica Coastal Zone Hotel 129
1111 2nd Street Santa Monica Coastal Zone Hotel 204
1667 Ocean Avenue Santa Monica Coastal Zone Hotel 20
2452 Lincoln Boulevard Santa Monica Coastal Zone Hotel 29 1447 Ocean Avenue Santa Monica Coastal Zone Hotel 70
849 Ocean Avenue Santa Monica Coastal Zone Hotel 70
1001 Third Street Santa Monica Coastal Zone Hotel 28
1700 Ocean Avenue Santa Monica Coastal Zone Hotel 342
1740 Ocean Avenue Santa Monica Coastal Zone Hotel 175
2102 Lincoln Boulevard Santa Monica Coastal Zone Hotel 34 1670 Ocean Avenue Santa Monica Coastal Zone Hotel 35
2637 Main Street Santa Monica Coastal Zone Hotel 20
1760 Ocean Avenue Santa Monica Coastal Zone Hotel 17
1515 Ocean Avenue Santa Monica Coastal Zone Hotel 178
1 Pico Boulevard Santa Monica Coastal Zone Hotel 198
2219 Ocean Avenue Santa Monica Coastal Zone Hotel 4
1301 Ocean Avenue Santa Monica Coastal Zone Hotel 71
1415 Ocean Avenue Santa Monica Coastal Zone Hotel 84
120 Colorado Avenue Santa Monica Coastal Zone Hotel 132 205 Washington Avenue Santa Monica Coastal Zone Hotel 52 1819 Ocean Avenue Santa Monica Coastal Zone Hotel 169
1255 20th Street Santa Monica Non-Coastal Zone Hotel 77 1234 Lincoln Boulevard Santa Monica Non-Coastal Zone Motel 9 2815 Santa Monica Boulevard Santa Monica Non-Coastal Zone Hotel 108 1554 5th Street Santa Monica Non-Coastal Zone Hotel 136 3007 Santa Monica Boulevard Santa Monica Non-Coastal Zone Hotel 67 1920 Santa Monica Boulevard Santa Monica Non-Coastal Zone Hotel 123 501 Colorado Avenue Santa Monica Non-Coastal Zone Hotel 143 1102 Pico Boulevard Santa Monica Non-Coastal Zone Motel 11 530 Pico Boulevard Santa Monica Non-Coastal Zone Hotel 315 2680 32nd Street Santa Monica Non-Coastal Zone Motel 46 2020 14th Street Santa Monica Non-Coastal Zone Motel 26 815 Grant Street Santa Monica Non-Coastal Zone Motel 14 7 of 8
710 Wilshire Boulevard Santa Monica Non-Coastal Zone Hotel 285 3102 Pico Boulevard Santa Monica Non-Coastal Zone Hotel 83 Given Chapter 4.63 does not cleanly account for the changes adopted by the City of Los Angeles that are scheduled to take effect on July 1, 2026, and the uncertainty in applicable wages for both workers and employers that will result, staff has prepared both an Emergency Ordinance, which, if adopted, would take effect immediately, and an Ordinance for introduction and first reading, which if introduced and subsequently adopted on second reading at a future meeting, would take effect 30 days after adoption.
Environmental Review
The action taken by the City Council is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) (Common Sense Exemption) of the CEQA Guidelines, which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment”. The measures are administrative in nature in that they provide for a hotel worker living wage and health benefits. Therefore, it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.
Financial Impacts & Budget Actions
None.
Prepared By: Heidi Von Tongeln, City Attorney
Approved Forwarded to Council
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Attachments:
A. ORD--Emergency Amendments to Chapter 4.63 Hotel Worker Living Wage
06.09.26 B. ORD--Amendments to Chapter 4.63 Hotel Worker Living Wage 06.09.26 C. Staff Report Minimum Wage September 29, 2015
D. Staff Report Minimum Wage January 12, 2016
E. Staff Report Minimum Wage April 26, 2016
F. City of Los Angeles Ordinance 188944
G. Written Comments