Union Claims Hotel Chain Neglected to Pay Employees Despite Receiving PPP Loans

Many businesses impacted by the coronavirus pandemic applied for Paycheck Protection Program (PPP) loans under the U.S. Coronavirus Aid, Relief, and Economic Security (CARES) Act. These loans were for businesses to use as emergency funds to pay their employees. However, some businesses, like Omni Hotels and Resorts, took PPP loans and allegedly did not use them for payroll purposes, WAMU American University Radio reports.

Representatives from Unite Here, a service workers union, told WAMU that several Omni hotels took PPP loans but did not pay hundreds of its workers, including housekeepers. The international hotel chain received about US$76 million in PPP loans for 32 of its hotels. About $23 million of that money went to seven hotels in large cities like Chicago, Boston, Washington, D.C., and San Francisco.

Carlos Aramayo, Unite Here’s executive vice president, told WAMU that he spoke to hundreds of workers at the Omni Parker House in Boston and “none of them have received a single dime of this money.”

The Omni Providence Hotel in Rhode Island applied for a $2.6 million PPP loan, which was approved in April, to retain 246 jobs. However, workers did not receive wages, the unemployment benefits for many expired, and their health care coverage is gone. Quilcia Moronta, a health club attendant at the hotel for 21 years, told WAMU, “We haven’t heard anything about Omni using that money to help their employees.”

A spokesperson for the hotel chain said in a written statement that hotel workers were not retained because the facilities were closed or operating at a reduced capacity. The hotel chain will return or repay any amount of the PPP loans that are not forgiven. However, PPP rules permit the funds to be used for payroll even if the business is closed.

“Other businesses maybe didn’t get money because Omni did, either truly small businesses that were struggling or another company that might have used it to actually pay their workers,” said Lisa Gilbert, executive vice president of the consumer advocacy group Public Citizen. “It doesn’t seem like a great investment of taxpayer dollars, even if they pay back the money at the end of the day.”

Businesses who received more than $2 million in PPP loans will be audited. Aramayo wrote to the U.S. Small Business Administration and the Treasury Department in December to urge them to scrutinize PPP loans to Omni hotels. “It’s really not fair for a company to take money that was intended to help out their own workforce and use it for some other purpose,” he said.