A new agreement was reached this week between union workers and hotel owners in New York suburbs that will boost wages to record levels, according to US publication, The Wall Street Journal (WSJ).

The arrangement will increase the hourly wages for housekeepers and front-desk workers from around US$20 per hour to $27 by 2028, depending on where they work. The union also announced that cooks’ hourly wages will rise to approximately $31.

The deal also includes a 40% increase in employer contributions to the union’s pension plan, and additional benefits to help subsidize child care and housing costs.

A Tweet posted by the Hotel and Gaming Trades Council explained the agreement will cover 7,000 hotel workers at 87 suburban hotels from New Jersey’s Princeton to New York’s Albany region and Long Island.

The deal has reportedly already been ratified by the employers and is expected to be ratified by workers this month. The new contract does not include New York City hotels, where union members are also represented by the Hotel and Gaming Trades Council and where wages are still higher compared to the suburbs.

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However, the wage increase in the suburban areas is due to the hotels’ proximity to New York City.

The hospitality sector faces growing pressure to increase pay for hotel workers

The WSJ report suggests the hotel industry is under intense pressure to raise wages for workers due to inflation and labour shortages caused by the pandemic.

It explains that many hotel owners are struggling to find and retain workers and are offering incentives such as retention bonuses, career development programmes, and flexible schedules to attract and retain talent.

The unionisation rate of the hotel workforce is around 10% nationwide, with unions typically found in brand-managed, full-service hotels in large US cities like New York, Chicago, San Francisco, Los Angeles, and Honolulu.

The report also explains that higher wages and benefits will benefit hotels as it will enable them to retain employees.