Tom Yamachika: A Ham-Fisted Way Of Getting Folks Back To Work - Honolulu Civil Beat

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Tom Yamachika

Tom Yamachika is the president of the Tax Foundation of Hawaii.

Here in the City and County of Honolulu, lots of people are out of work, especially in the hospitality industry. At some point the economy will reopen, and people will start occupying hotels again.

Then, according to a proposal before the Honolulu City Council, we force the hotels to rehire people to their old jobs. Or comparable ones.

The proposal is called Bill 80. One of its first provisions says, “A hotel employer shall recall to active employment the same number of employees in substantially the same classifications as the hotel employer’s active workforce on March 1, 2020, adjusted by the ratio the occupancy of the hotel bears to 100 percent. A hotel employer must clean and sanitize every occupied guest room every day and must employ a number of housekeeping employees to ensure that this standard is met.”

Sheraton Waikiki Hotel and the Royal Hawaiian Hotel. Waikiki Beach
COVID-19 has deeply hurt business at places like the Sheraton Waikiki Hotel and the Royal Hawaiian Hotel. But should they be required to rehire laid off workers? Cory Lum/Civil Beat/2019

The bill then mandates that an employer offer its laid-off employees all job positions which become available for which the laid-off employees are qualified. Qualified means that the employee held the same or similar position at the enterprise at the time the employee was laid off, or the employee is or can be qualified for the position with the same training that would be provided to a new employee.

The positions the employer would need to offer would need to be in the same classification or job title with substantially the same employment site (with some exceptions), duties, compensation, benefits, and working conditions as applied to the laid-off employee before March 21, 2020.

The provisions in the ordinance could be enforced by private lawsuit, and if the employee wins the employer would need to pay the employee’s attorney’s fees.

Union Pressure

So far, the hotel workers’ unions are pushing the bill and are getting individual employees (or former employees) to testify in favor of it. The hotels are screaming bloody murder. The bill has been cleared by one council committee, paving the way for it to receive a public hearing before the council.

On Tuesday, the Honolulu Star-Advertiser reported that the public hearing has been delayed because of concerns expressed by city lawyers, but Councilman Ron Menor made it clear that an amended version of the bill still could move forward this month.

One of the fundamental questions this bill raises is, how far does government power extend? We as a country brag about the free enterprise system in our economy. But is it really free when government can dictate who to hire and how much to pay?

We raised concerns about minimum wage legislation which is, when you look at its structure, a prohibition upon hiring unless the employer can pay a certain amount. The upshot is that employers are given a disincentive to hire. The same can be said here.

Would hotels really want to reopen if the government shoves hiring decisions down their throats?

There are also sovereignty issues. Our federal government has a National Labor Relations Act, and the Supreme Court held in San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959), and many cases since, that the Act displaced state and local power to regulate broad aspects of labor relations.

The hotels are screaming bloody murder.

We also have a state Department of Labor and Industrial Relations, and various statutes that regulate the balance between management and labor. If those statutes are to have meaning, counties arguably should not have the power to upset that balance.

It seems to us that rehiring and recall decisions should not be made by a government less acquainted with the economic damage that has befallen employers as well as employees. The weighing of woes, the back-and-forth, and the agreements can and should be made at the bargaining table.

And while we’re at it, perhaps we should be re-examining other employer and employee mandates, including payroll taxes, to see if they really are necessary or are at an appropriate level, especially when the normal management-labor dynamic has been scrambled by the pandemic.

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About the Author

Tom Yamachika

Tom Yamachika is the president of the Tax Foundation of Hawaii.

Latest Comments (0)

Government's roll in employment should be limited to collecting taxes, enforcing employment law (questionable how well they do that) and offering training and opportunity for advancement.  Regulating how private enterprise hires and what they pay, is for the free market to determine.  What intervenes in this equation, is organized labor unions.  Originally sprouting from the need for safer working environments, child labor and other industrial revolution era inequities, our local version has little to compare itself to, aside from the fact that they run much of the unskilled and blue collar workforce, including all state and local government workers and thus, government.  In addition, they have organized other low skill labor such as the hotel industry.  As hotels slowly open, it should be their decision alone as to who and how many workers they need to hire and possibly break even.  The state on the other hand should be focusing on adjudicating and promptly paying the thousands of unemployment claims yet outstanding to those that do not have jobs to go back to.  That is a part of government's responsibility.  

wailani1961 · 2 years ago

If government needs to micromanage the economy to ensure "fairness", then why not just go all the way, put everyone on welfare and cut out the obsolete and unnecessary private sector?

nobody · 2 years ago

Government has an obvious role to play in employment, and several ways to reward or penalize employers, presumably to encourage full and fair employment, development of workers, and wage requirements designed to prevent workers requiring public assistance. They provide the legal framework under which conducting business is possible.Government doesn’t however control the economy directly, and can’t force employers to rehire workers and operate at a loss; that’s typically done by contract between labor and management, and must reflect economic reality for both sides. Current contracts do require rehiring of union labor at the contractually set wages, but the amount and type of that labor must be determined by the market for hotel rooms, not by council mandate.The pandemic has changed the economic climate for the next several years, and it’s up to management and labor to negotiate how and when people can return to their jobs. The council should stay focused on encouraging full employment as soon as it can be both safe and economically viable.The council and mayor should focus on eliminating illegal TVRs, which unfairly compete with now too empty hotels. 

Wylie · 2 years ago

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