Beginning on January 1, 2023, California will go one step further in combating the pervasive problem of sex trafficking in hotels and motels by imposing liability on owners for failing to identify and report sex trafficking activity when supervisors knew or should have known it was occurring on their property. As a result, hotel owners and operators should work to ensure staff receive proper training and set clear policies and procedures for employees to report activity.
Existing Law Limited to Training
Currently, the law in California only requires hotels subject to the Fair Employment and Housing Act (FEHA) to provide a minimum of 20 minutes of classroom or other effective interactive education and training regarding human-trafficking awareness to each employee who is likely to interact with victims of human trafficking. These positions include housekeeping, maintenance, and room service staff; concierge, bellman, front desk, security, and valet staff; and food and beverage staff. This mandatory training and education must include:
- The definition of human trafficking and commercial exploitation of children.
- Guidance on how to identify individuals most at risk for human trafficking.
- The difference between labor and sex trafficking specific to the hotel sector.
- Guidance on the role of hospitality employees in reporting and responding to this issue.
- The contact information of appropriate agencies.
Businesses that fail to comply with this training requirement may face an order requiring compliance from the Department of Fair Employment and Housing. While this training requirement includes guidance on reporting and responding, existing law does not create an affirmative requirement that a hotel or its employees report trafficking activity.
AB 1788 - The New Reporting Requirements Beginning on January 1, 2023
Beginning on January 1, 2023, hotels will face civil penalties if a supervisory employee knew or should have known of sex trafficking activity occurring within the hotel and failed to inform law enforcement, the National Human Trafficking Hotline, or another appropriate victim service organization within 24 hours.
In addition, a hotel will also face penalties for any employee acting within the scope of employment who knowingly benefits "from participating in a venture that the employee knew or acted in reckless disregard of the activity constituting sex trafficking activity within the hotel."
Penalties and Civil Liability
The new law will authorize a city, county, or city and county attorney to seek equitable relief against a hotel, and to seek a civil penalty of $1,000 for the first violation, $3,000 for the second violation within the same calendar year, and $5,000 for the third within the same calendar year. The bill also authorizes courts to increase the amount of the civil penalties from the 4th violation and beyond in its discretion. The additional amount of the penalty in this case may not exceed $10,000.
Based upon the text of the law, the mere lack of reporting of a sex trafficking case occurring in a hotel shall not, by itself result in the liability of an employer to the sex trafficking victim or victims. However, a hotel may now face liability to the victim if: (1) "a supervisory employee of the hotel either knew of the nature of the activity, or acted in reckless disregard of the activity constituting sex trafficking activity within the hotel, and the supervisory employee of the hotel failed to inform and report to the appropriate agency, the hotel could be liable; or (2) an employee of the hotel was acting within the scope of employment and knowingly benefited, financially or by receiving anything of value, by participating in a venture that the employee knew or acted in reckless disregard of the activity constituting sex trafficking within the hotel.
Statute of Limitations
The statute of limitations requires that the action be brought within 5 years of the violation, or within 5 years of the victim reaching the age of majority.
The attorneys at Wood, Smith, Henning & Berman stand ready to advise all clients and other interested parties on the implications and requirements imposed on hotels and motels by this new legislation. Please reach out to the author of this article or a member of our team with any questions or concerns.