Union urges Small Business Administration to take a close look at hotel chain’s post-PPP layoffs

The Paycheck Protection Program (PPP) was supposed to keep small businesses from laying off workers during the coronavirus pandemic. (Disclosure: Kos Media received a Paycheck Protection Program loan.) It hasn’t always worked out that way. Trump and Kushner businesses got loans, as did predatory payday lenders, but many of the businesses that needed the loans most were left out

UNITE HERE, the union representing hospitality workers, has set its sights on a major hotel chain that got tens of millions of dollars in PPP loans but laid off the workers at many of its hotels. In a letter to the Small Business Administration (SBA), the union calls on the SBA to “closely scrutinize” the hotels and the lending banks.

Omni hotel affiliates got a whopping $76 million across 32 PPP loans, according to UNITE HERE. But in the cases for which the union has “direct knowledge,” five hotels got nearly $15 million in loans. Despite that, “Three of them—Omni Providence, Omni San Francisco and Omni William Penn—are temporarily closed, and none of our members have been rehired or paid by the hotel. The Omni New Haven and Omni Parker House only recently reopened without all of their facilities, and the hotels have failed to recall more than 80% of our members who work at the hotels.”

This is not what the PPP was supposed to do, and it’s directly harmful to the workers. “The failure of these hotels to rehire their employees has financially harmed our members and created great uncertainty for them and their families. So far, we have not received commitments from Omni to use the loans to fully rehire the workers we represent.”

The union also sent letters to the managers of the hotels in question, noting that they appear not to be in compliance with the PPP’s terms and calling on them to rehire workers, along with letters to the banks responsible for most of the loans, calling on them to take a very close look at whether the hotels qualify for forgiveness.

“It is time for the SBA to step up and ensure that money intended to help American workers actually benefits them,” said UNITE HERE Executive Vice President Carlos Aramayo. “It is unfathomable that massive corporations like Omni have access to millions of tax-payer backed loans, while hundreds of their workers remain without a paycheck heading into the holidays.”

Rep. Katie Porter previously called for an investigation into hotel layoffs in and around her California congressional district after those hotels received PPP loans.

This blog originally appeared at Daily Kos on December 15, 2020. Reprinted with permission.

About the Author: Laura Clawson has been a contributing editor since December 2006. Clawson has been full-time staff since 2011, and is currently assistant managing editor at the Daily Kos.

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Madeline Messa

Madeline Messa is a 3L at Syracuse University College of Law. She graduated from Penn State with a degree in journalism. With her legal research and writing for Workplace Fairness, she strives to equip people with the information they need to be their own best advocate.