UNITE HERE Locals 11 and 40 Call on US Government to Stop Forgiving Westmont Connected Paycheck Protection Program Loans

LOS ANGELES–(COMMERCIAL THREAD) – UNITE HERE Local 11, which represents 32,000 hospitality workers in Southern California, and UNITE HERE Local 40, which has more than 5,000 members in British Columbia, wrote to the US Small Business Administration to demand an immediate end to the cancellation of the $ 34 million loan. in the Paycheck Protection Program (“PPP”) loans linked to the Westmont Hospitality Group. Although Congress has predicted that PPP loans will be used by small businesses, Westmont claims to be one of the largest private hotel organizations in the world, owning a stake in and operating more than 500 hotels.I

Westmont took advantage of a loophole that allowed large hotel chains to apply for loans initially intended for small businesses, and the US Small Business Administration, which oversees the PPP, has already canceled a loan linked to the company’s head office in Houston. . PPP borrowers were required to spend 60% of the PPP loan proceeds on labor costs to receive full loan forgiveness,ii but the SBA has not disclosed how Westmont used its P3 loans.

The letter calls for an investigation of the 35 loans related to Westmont and asks how many of the 4,024 employees reported related to the loans have been terminated or placed on leave without benefits. Two loans totaling $ 5.49 million indicated the address of the Hyatt Regency Jacksonville, Florida hotel, which an entity linked to the Westmont headquarters in Houston purchased in 2017. WARN notices posted by the hotel in 2020 indicate that 121 employees were “affected by permanent separations”. and 92 employees were “affected by conversions of leave with benefits to temporary layoffs without benefits. ”

In total, a UNITE HERE Local 11 analysis (available here) shows hotels raised $ 13.9 billion from the PPP, including $ 3.3 billion through loopholes that allowed big chains like Westmont to receive loans. and granting hotels 40% more loans than other borrowers in 2021.iii

As of July 1, the SBA canceled a total of $ 4.2 billion in PPP loans to US hotels, converting them into grants without revealing how they were spent. Although Congress planned for P3 funds to be used to send workers back to the payroll, the number of hotel jobs in the United States from May 2020 to June 2021 was on average only 20% higher than the number of hotel workers. hotel jobs in April 2020 after the pandemic caused a sharp drop in hotel employment.iv

The letter also asks if Westmont has received any loans related to the Pan Pacific Hotel in Vancouver, British Columbia. The Westmont-owned hotel has laid off about 100 long-term laid-off workers, without cause, amid the pandemic. The hotel also reportedly urged workers to give up their full-time status and termination rights, and then fired some of them anyway. Two class actions were filed against the hotel on behalf of the dismissed workers.

UNITE HERE Local 11 represents hundreds of workers at the Westmont-operated Hilton Hotel & Suites in Santa Monica, California, and Westdrift Manhattan Beach, California.

UNITE HERE Local 11 is the union of more than 32,000 workers in hotels, restaurants, airports, arenas and convention centers in So. California and Arizona.

UNITE HERE Local 40 represents more than 5,000 workers in hotels, restaurants, airports, arenas and convention centers in British Columbia.

I Westmont Hospitality Group website, https://www.whg.com/.

ii “PPP Loan Forgiveness,” accessed June 21, 2021, https://www.sba.gov/funding-programs/loans/covid-19-relief-options/paycheck-protection-program/ppp-loan-forgiveness

iii The Local 11 analysis used data from May 2021 released by the SBA. As of July 1, the amount of PPP loans to US hotels rose to $ 13.9 billion.

iv Data for the “Housing: NAICS 721” sector from the Bureau of Labor Statistics, available at https://data.bls.gov/timeseries/CES7072100001?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true

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