Santa Monica Wage Lawsuit: Lessons for Employers
When a $20 bowl of hummus costs more than an employee’s hourly wage, a company doesn’t just have a PR problem—it may face a Santa Monica wage lawsuit. That’s exactly the issue at the center of the luxury Santa Monica Proper Hotel.
The property, known for its $600–$2,600 per night rooms, $20 hummus, and $250 wagyu steaks, is now facing claims from two servers who filed suit on behalf of more than 100 workers.
They allege the hotel paid employees less than the Santa Monica minimum wage, and in some cases, less than the cost of its appetizers.
The Legal Backdrop
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Federal minimum wage: $7.25/hour (U.S. Department of Labor).
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Santa Monica hotel worker living wage:
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$19.73/hr in 2023
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$20.32/hr in 2024
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$21.01/hr effective July 2025 (City of Santa Monica Wage Ordinance).
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The law allows only two narrow exceptions:
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A one-year waiver (if compliance would shut down the business)
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A collective bargaining agreement (CBA) with clear waiver language
According to the lawsuit, Santa Monica Proper:
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Never sought a waiver from the City
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Let its CBA expire in June 2023
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Paid wages that haven’t kept pace since then
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Relied on CBA language that doesn’t clearly waive compliance
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Has reached an impasse in negotiating a new CBA
The Santa Monica wage lawsuit highlights how quickly wage disputes can escalate into costly, public legal battles.
Why the Santa Monica Wage Lawsuit Matters for Employers
Employees notice when their wages fall behind the law—or even behind the price of menu items. That sends a loud signal:
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Leadership doesn’t value them
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If the company won’t honor obligations, why should employees go above and beyond?
And in today’s tight labor market, that perception can be devastating. For more on connecting compliance with retention, see my insights on retaining top talent through workplace culture and compliance (internal link).
Key Lessons from the Santa Monica Wage Dispute
👉 Align pay with local ordinances – Compliance avoids risk and builds goodwill.
👉 Draft CBAs with precision – Ensure waiver language is clear and covers exactly what you intend. If your team needs help strengthening agreements and avoiding disputes, my workplace legal strategy services (internal link) can provide guidance.
👉 Plan for CBA expirations – Address what happens when agreements lapse to prevent costly disputes.
👉 Think beyond legal minimums – Paying slightly above required wages can improve retention, morale, and reputation. HR leaders can benefit from strategies to reduce the risk of retaliation claims (internal link), since pay and retaliation often go hand-in-hand.
The Bottom Line
The Santa Monica wage lawsuit is a stark reminder: Just because you can, doesn’t mean you should.
Following the letter of the law isn’t always enough. Smart employers go further—building compliance and workplace culture that attract and retain talent, rather than drive them to file lawsuits.
If your company is facing questions about compliance or struggling with overlapping obligations like FMLA, ADA, and workers’ comp, check out my training on navigating workplace law complexities .
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💼 Maybe You Think Everything’s Fine? That’s What Most Employers Think—Until It Isn’t.
Compliance gaps, unclear policies, and communication breakdowns often fly under the radar—until they result in:
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Employee lawsuits
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Failed DOL or EEOC audits
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Union activity
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High turnover
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Trouble attracting and retaining top talent
If you’re ready to get ahead of these hidden legal and operational risks, let’s talk.
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