AB 1074 Kicks Family-Owned Hotels When They’re Down

Bill guts small businesses’ right to hire vendors; lacks clear definitions

SACRAMENTO, Calif.–(BUSINESS WIRE)–The California Hotel and Lodging Association today called on state legislative leaders to reject AB 1074, an overly broad attempt to dictate hiring practices for small businesses, including a majority of the state’s 6,000 hotels owned and managed by local families.

AB 1074, as written, mandates that small businesses and hotel operators who contract out services will no longer have control over which vendors and which vendor employees they may hire.

“AB 1074 is a solution in search of a problem,” said Lynn S. Mohrfeld, President and CEO of the California Hotel and Lodging Association. “Its implementation would add yet another unnecessary burden to small, family-owned businesses, who already are suffering from the greatest economic challenges of their lifetimes.”

The proposed legislation, which is scheduled to come before the State Senate Committee on Appropriations when the legislature returns Aug. 16, fails to define clearly which businesses and which of their services are to be regulated, creating gaps of interpretations that are confusing to all, especially, for small hotel operators without the means to ensure compliance. Most of California’s bed and breakfast operators have only a few staff and contract out most services, which under AB 1074, will be mandated to hire only employees from previous vendors despite their poor performance.

Many of California’s limited-service hotel operators struggled through or didn’t survive pandemic shutdowns as they faced extraordinary financial and regulatory burdens. AB 1074 is expected to push out more small hotel owners, hurting the state’s top industry and its employees just as they begin the long and uncertain road to economic recovery.

CHLA recommends AB 1074 be rejected outright.

“The irony here is painful because this attempt to dictate small business hiring practices will hurt the employees its authors want to protect and will certainly harm family-owned businesses, just as we began to recover from 17 months of pandemic closures,” Mohrfeld said.

About the California Hotel and Lodging Association

The California Hotel and Lodging Association is the leading resource and advocate for California’s more than 6,000 hotels, motels and boutique inns that employ more than 235,000 workers. CHLA, established in 1893, is the largest state lodging industry association in the nation and is a partner with the American Hotel & Lodging Association. For more information, go to www.calodging.com.

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