Labor Relations in Hospitality & Gaming

Labor relations in the hospitality and gaming industry is complex because so many different types of jobs and unions are involved. The hospitality and gaming industry is a broad sector that includes hotels, resorts, restaurants, fast food, take-out, catering, nightclubs, bars, meeting and event venues, gaming, and travel and tourism. The functions can be separate or overlap, like casinos with restaurants, bars with gambling, and meeting events with catering and hotel contracts. Like the retail industry, it has a high number of low-wage workers, and many of them work more than one job.   

The COVID-19 pandemic opened a pandora's box of issues, including work schedules, pay, job security, benefits, and employee voice. Labor unions see an opportunity to increase membership because one fact prevails. The issues brought into the light during the pandemic are not only pandemic related. Most existed before the pandemic, and employee feelings of empowerment have led to employee activism to bring change. Your leaders should be trained in labor relations, understand the pressure placed on employees to get involved in union organizing as a solution to their needs and take steps to develop positive employee relations to prevent union organizing.  

By the Numbers in the Hospitality & Gaming Industry  

Per the U.S. Bureau of Labor Statistics (BLS), the hospitality industry accounted for 8.9 percent of total U.S. employment in 2021, and 23.1 percent of all jobs projected to be added to the U.S. economy between 2021 to 2031 will be in this industry. It is the fastest-growing employment sector and currently employs more than 15.8 million people, of which 13.8 million are employment, production, and nonsupervisory employees.   

Despite the leisure and hospitality industry's employment size, overall union rates are low. About 2.8 percent of wage and salary employees are represented by unions, and 2.2 percent are members of unions, making this industry a natural focus of labor unions desperate to take advantage of the pro-union environment that currently exists. The industry has some characteristics that unions can easily latch on to gain a bigger foothold. Approximately 68 percent of workers do not have employer-sponsored healthcare, and 70 percent do not have access to a retirement plan through their employer. Low wages supplemented with tips is another major concern for the government and unions. The Department of Labor issued a new regulation that requires employers to pay workers who earn tips a minimum of the federal minimum wage for any work that is not tipped-based or supports tip-producing work (think cooks, table cleaners, hostesses, etc.)  

The U.S. Travel organization evaluated the employment status of the BLS-defined leisure & hospitality industry as of November 2022.   

• Employment remains 6.5 percent below pre-pandemic levels meaning the equivalent of 1.1 million jobs remain lost. 
• The industry is suffering from the second-highest share of jobs still lost at (minus) 7.65 percent, with only mining and logging experiencing a higher loss. 
• The accommodation sector is the furthest behind at 17.1 percent below pre-pandemic levels.
• The industry is having difficulty filling job openings even as they have increased and account for 15 percent of all U.S. job openings.
• The industry's job quits rate (think: Resignation Nation) is substantially higher at 5.3 percent compared to the U.S. economy's job quit rate of 2.7 percent.
• .For every 100 job openings, there are 54 unemployed workers, meaning workers from outside the U.S. will need hiring to close the gap. 
• Wages have grown from an average of $17.12 per hour at the start of the pandemic to $20.43 in October 2022 

Union Organizing in the Hospitality & Gaming Industry 

The leisure and hospitality industry is large and varied, so there is a mix of labor unions involved. It makes it more challenging for employers to keep unions out because there are a variety of labor unions ready to begin a union organizing campaign in your restaurant, hotel, bar, casino, and so on. Following are the biggest labor unions organizing the hospitality and gaming industry and some of the smaller efforts of employee activists. 

UNITE HERE:The union was formed by merging two unions – UNITE and HERE (Hotel Employees and Restaurant Employees Union). The two unions separated five years later, and Workers United was formed (mentioned later). UNITE HERE is the primary labor union representing food service, hotel, airport, gaming, and other workers in the U.S. and Canada and has over 300,000 members. It represents more than 100,000 casino workers alone.  

The union has held numerous strikes and is famous for holding the six-year strike at the Las Vegas Frontier Hotel & Casino from 1991-1997. Just recently, in September 2022, Unite Here fast food workers at the San Francisco International Airport went on strike over wage rates. Most made $17.05 and had not received a wage increase in three years. The strike lasted three days and led to workers signing a new contract that provides free family health care and increases the hourly rate by $5 an hour.  

Culinary Union: UNITE HERE is the parent union of the Culinary Union. This union primarily represents employees at the casinos in Las Vegas and Reno. It has more than 60,000 hospitality workers as members. The union organizes strikes, runs its own health fund and pension plan, and provides other services members need. It's considered to fundamentally be a political organization (funded by union dues, of course) that is heavily involved with the Democratic party and has lobbied for a number of legislative bills in Nevada. Many state employment laws are due to union influence. Membership is majority women and Latinos. As U.S. demographics change, this union sees enormous opportunities to grow. The members include guest room attendants, cocktail and food servers, bakers, porters, cooks, bellmen, bartenders, and kitchen and laundry workers.  

Service Employees International Union (SEIU): The powerful SEIU has approximately two million members, including workers in the leisure and hospitality industry. The SEIU is the parent union of a number of affiliates, like the National Fast Food Workers' Union. It's main membership in the hospitality industry is through its affiliate, Workers United.   

Workers United: An affiliate of the SEIU, Workers United represents 150,000 workers, and among them are food service and laundry workers. As mentioned earlier, Workers United was formed when UNITE HERE split away from a previous two-union merger. Workers United represents more than 86,000 workers in total. Their website gives the distinct impression they are preparing to have a greater impact through their affiliation with the SEIU, which means more aggressive unionizing efforts.  

Non-traditional and independent union organizing should not be ignored. The Restaurant Opportunities Centers (ROC) is a national organization that is worker-led in the restaurant industry. It has 65,000 members who are women, immigrants, people of color, and members of the LGBTQIA community. The goal is to engage 20 percent of the restaurant workforce by 2030. 

The One Fair Wage campaign organizes service workers, employers, and consumers to advance local, state, and federal policies requiring a full, fair minimum wage with tips added on.   

Union activity in the South is a particular target of labor unions currently because of low unionization rates. In November 2022, 100 service industry workers launched the Union of Southern Service Workers. The members work in fast food chains, retail stores, nursing homes, and warehouses.   

One of the organizing challenges that labor unions face is the disparate restaurant and hotel types. There are national chains, mom-and-pop operations, quick service, fine dining, and everything in between. Organizing one hotel, restaurant or bar makes it difficult for unions to progress membership. It is one reason you see an increase in organizing where workers form their own independent unions like Starbucks workers have done to organize store-by-store. Traditional labor unions have been more interested in larger employee groups. They will send representatives to employee rallies and perhaps donate some money, but their main effort is directed at workplaces where they can make significant inroads on recruiting new members. This makes large hotel and restaurant chains prime labor union targets. 

Raise Up the South is another organizing group for fast food workers. An affiliate of the national Fight for $15 and a Union, the focus is on organizing the Southern region where many of the states are right-to-work states.  

Most Common Issues Related to Labor Relations in Hospitality and Gaming

There are many issues in the industry, and these are issues that are attracting labor union attention.   

Declining union membership has created an opportunity for increased activism among workers and potential for increased unionization, according to Alexis Walker, Chair of History & Political Science at Saint Martin's University. She has done extensive research on American politics and organized labor. Employees are frustrated for many reasons, including the impact of a labor shortage that creates situations of understaffing and puts more pressure on current employers to keep employees engaged in difficult working conditions. It's not surprising that employees across industries are conducting walkouts, protesting, and striking. Some only last for days, but even a 3-day walkout is extremely damaging in an industry that serves and entertains the public.  

What are employees frustrated and upset about? Some of the common issues in the hospitality & gaming industry include the following.

• There are persistent low wages and stagnated wages coupled with high turnover. 
• Many employees need to work two or more jobs to earn enough to support their families, making work-life balance impossible. 
• Employees either do not get benefits or are excluded from benefits they consider essential, like family health coverage. 
• Work schedules can be too unpredictable, making it impossible to plan financially. 
• Workloads are excessive due to the labor shortage and lead to burnout. 
• Health and safety remain important concerns post-pandemic, and employees believe their employer has eased off too many safety procedures.  
• Frustrated customers abuse workers. 
• Older union contracts are viewed as contracts employees agreed to before they were empowered to better stand up for their rights and are anxious to renegotiate them. 
• Employees believe they lack a collective voice in the workplace. 
• Workers endure sexual harassment. 
• Workers are discriminated against. 
• There is no career planning because employers view the workers as non-career employees. 

Technology is another issue and an issue you will have to address with employees to avoid unionization. Like every other industry, technology is changing the hospitality and gaming industries. For example, there are hotels in the U.S. that are using robots to provide guest services because they are severely short-staffed. Labor unions fear the growing use of robots and other automation technologies because it means dues-paying union members are replaced. "We are not going to stop new technology," said D. Taylor, International President of Unite Here, representing 300,000 hospitality workers across the US and Canada. "But the question is, are you going to be part of the process or run over by it?" 

Make Positive Employee Relations a Priority 

Expanding employment and labor laws are making it more difficult in every industry to avoid Unfair Labor Practice (ULP) charges and avoid unionization. The pro-union Biden Administration and National Labor Relations Board (NLRB) and more favorable public opinion of unions make it easier for employees to file ULPs and conduct union organizing campaigns. The best action plan is to focus on developing positive employee relations and always remain prepared to respond to signs of union activity.   

Following are some suggestions to explore with a labor relations consultant. 

• Make schedule changes and pay transparent and apply HR policies consistently, i.e., changing work hours or work days, cutbacks, etc. 
• Develop HR policies that address possible scenarios, like furloughs or layoffs based on seniority during periods of slow business 
• Communicate business issues with employees and give them an employee voice in decision-making (Employees don't understand the economic and political reasons for a labor shortage during their work shifts; they just know there aren't enough workers) 
• Promote employees from within to strengthen employee engagement 
• Train workers and help them with career planning. 
• Provide hourly workers with a path to salaried positions or career positions whenever possible 
• Hold regular virtual or in-person town halls or meetings. 
• Fully support remote workers with appropriate HR policies concerning the utilization of technology, availability, work performance standards, etc. 
• Find ways to limit the chances of employee burnout, like utilizing technology to streamline customer services.  
• Conduct cross-training to minimize employee stress and the loss of best workers during times of cutbacks 
• Utilize technology as a solution, like an employee app that provides a verified record of actual work time while off duty and ensures employees take their breaks; establish the rules of engagement when on or off duty so that supervisors don't ask employees to work when on their own time. 
• Provide your employees with the level and amount of job training they need to perform well. 
• Review and assess the employee compensation schedule to ensure it reflects industry rates and pays workers a fair wage 
• Review and assess employee benefits programs.  
• Train your leaders in labor relations and when to notify HR of policy violations or suspected union activity. 
• Make use of digital technologies like employee apps to gain insights into what employees are talking about. 
• Implement strategies to strengthen employee voice. 

This is a long list because each business is unique, and so much is taking place in terms of labor relations in hospitality and gaming industries. It can be overwhelming at first glance, and not every suggestion applies to every business. IRI Consultants can listen to your issues and work closely with you to select and develop the solutions you need to develop positive employee relations.