The 60-day cooling-off period in The City's hotel labor dispute expired Sunday with no agreement between the union and hotels, but both sides said workers would stay on the job -- for now.

The San Francisco Multi-Employers Group, which represents 14 hotels in The City, offered a new proposal Friday that included a $1.30 raise over the next four years for non-tipped employees and a 65 cent increase for tipped workers. A previous offer had set those increases at $1 and 50 cents, respectively, but Local 2 spokeswoman Valerie Lapin said Friday's proposal was still "unacceptable."

Matt Adams, managing director of the Hyatt Regency, said the hotels are "at a loss," after the union's refusal, since the newest proposal does not ask employees to increase their contribution to the health care fund -- an issue at the center of the labor dispute.

Lapin, however, said the newest proposal changes the amount of shifts an employee must work to qualify for health care, meaning "hundreds of our members would still go without benefits."

Thompson Ng, a housekeeper at the Palace Hotel for 12 years, agreed and said most workers "stand behind the union."

"But I don't think the workers would agree to another strike," Ng added.