By Lara Shortz & Natalie Manoogian
On June 29, 2025, Los Angeles Mayor Karen Bass signed into law sweeping amendments to the City’s Hotel Worker Minimum Wage Ordinance, now informally referred to as the “Olympic Wage Ordinance.” These changes are poised to significantly impact hotel operators citywide, especially in the lead-up to the 2028 Olympic and Paralympic Games. If your hotel has 60 or more guest rooms, this alert is for you.
Broadly, the newly enacted ordinance imposes substantial new requirements on hotels in Los Angeles—again, those with 60+ rooms. Chief among them: a wage increase, a mandatory city-run training program for housekeepers, and a phased-in health care payment mandate. These changes—set to take effect in stages through mid-2026—will materially increase labor costs, complicate staffing logistics, and may impact the viability of existing agreements, including those related to the 2028 Olympic Games.
Key Compliance Date
July 1, 2025: Minimum Wage Increase Takes Effect
All hotel workers at properties with 60 or more guest rooms must be paid a new minimum wage of $22.50 per hour. Under the ordinance, this rate will increase by $2.50 annually each July 1, ultimately reaching $30 per hour by July 2028
December 1, 2025: Housekeeper Training Requirements Begin
Hotels must comply with a city-administered training program for housekeepers. Further guidance will be issued, but initial requirements include
- Elimination of duplicative state/federal training mandates
- An RFP process for trainer selection and certification
- A system for collecting and auditing training certificates
(Note: The previously proposed written exam requirement was removed.
July 1, 2026: Healthcare Payment Mandate Takes Effect
Hotels must either:
- Provide qualifying health insurance, or
- Pay an hourly health credit of $8.35 to each employee
If a hotel employee waives employer-provided coverage due to existing third-party insurance, hotels must instead pay:
- $100/month for full-time workers
- $50/month for part-time workers
If the value of the provided health insurance is less than $8.35/hour, the hotel must make up the difference in pay.
Contractual Considerations for 2028 Room Blocks
Many hotels are parties to room block agreements with LA28 for the 2028 Olympics. The ordinance dramatically alters labor cost projections, with some estimating a nearly 100% increase in wage and healthcare costs by 2028.
In anticipation of this, hotel operators should:
- Review their existing room block agreements immediately
- Assess the feasibility of continued performance under those contracts
- Consider invoking legal doctrines such as impracticability or frustration of purpose to renegotiate or withdraw from agreements where performance has become commercially unreasonable
We are advising clients to take these steps now, while momentum builds among similarly situated hotels.
Advocacy & Next Steps
A referendum effort to pause the ordinance until after the next municipal election (June 2, 2026) is now underway, spearheaded by a coalition including the American Hotel & Lodging Association (AHLA). Meanwhile, the City of L.A. has committed to issuing impact reports at both six-month and one-year intervals. It is crucial that hoteliers document operational and financial impacts now to help shape future revisions.
Final Thoughts
This is one of the most consequential regulatory shifts for L.A.’s hotel sector in recent memory. The ordinance brings with it both compliance obligations and strategic opportunities for thoughtful engagement. While its short-term burdens are real, proactive planning and legal guidance can mitigate exposure.
In addition to the direct financial impact, the ordinance is expected to trigger significant wage compression across hotel operations, particularly among supervisory and mid-level roles whose pay scales may now sit too close to newly increased minimum wages. This dynamic—combined with the phased-in health care costs—raises real concerns about restructuring, workforce reductions, and limitations on new hiring. Hotel operators should be planning now for how to manage these challenges while maintaining compliance and operational continuity.
We are advising all hotel clients to:
- Schedule internal compliance reviews with HR and legal advisors
- Document operational impacts in real time
- Evaluate contractual rights and obligations tied to room block agreements
- Monitor updates from the City and trade associations
As the hospitality industry braces for these sweeping regulatory changes, the time to prepare is now. Hotels that take early, strategic action will be best positioned to manage rising costs, protect operations, and navigate what promises to be a new and complex compliance landscape in Los Angeles.
This blog post is not offered, and should not be relied on, as legal advice. You should consult an attorney for counsel in specific situations.
