California Municipalities Mandate Hazard Pay for Essential Workers

While significant ink was spilled last summer evaluating whether Congress would pass the HEROES Act – House Democrats’ $3 trillion COVID-19 relief bill, the federal government was ultimately unable to implement an aid package that included, among other provisions, mandated “hazard pay” for essential workers.  In response, several local and municipal governments have taken up the call and have recently implemented laws to require additional wage premiums for employees in the grocery and pharmacy industries.  Unsurprisingly, these local initiatives have gained significant traction in California.

• On January 22, the City of Long Beach implemented the Hero Pay for Front-Line Grocery Workers Ordinance (which expires in May 2021).The ordinance requires certain grocery stores to pay hourly employees $4 per hour on top of their regular rates of pay.The law applies to grocery stores with 300 or more workers nationwide and at least 15 workers per store in the City of Long Beach, and includes anti-retaliation and posting requirements, as well as provisions affording employees the right to file a civil action for violations of the ordinance.

   

• On January 27, the City Council of Montebello passed the Premium Pay for Grocery and Drug Store Workers Ordinance, which went into effect immediately and expires in six months.Under the ordinance, grocery stores and retail pharmacies that employee 300 workers nationwide and at least 15 workers per location in the City of Montebello must pay nonmanagerial employees premium pay of $4 for each hour worked. The ordinance further prohibits employers from reducing an employee’s pay in response to the enhanced premiums required by the law or from otherwise retaliating against employees who avail themselves of the law’s protections.

   

• On February 2, the City Council of Oakland passed the Grocery Worker Hazard Pay Emergency Ordinance, which requires that large grocery stores in Oakland pay hourly workers an additional $5 per hour for every hour worked.This hazard pay mandate applies to all grocery stores that employ 500 or more workers nationwide, and includes posting and notice requirements, as well as anti-retaliation provisions prohibiting employers from taking adverse actions against employees who exercise rights under the ordinance.

   

• On February 10, the City Council of Coachella passed the Premium Pay for Agricultural, Grocery, Restaurant, and Retail Pharmacy Workers Ordinance, requiring employers in the agricultural, grocery, restaurant and retail pharmacy spaces to provide employees of these entities who work in Coachella an additional $4 per hour for every hour worked.The law applies to those covered entities that employ at least 300 workers nationally and more than five employees per location in Coachella.It also prohibits employers from reducing worker pay to offset the law’s enhanced pay requirements, prohibits retaliation, mandates the posting of notices, and includes a private right of action for aggrieved employees.

These ordinances, which have been viewed as a boon for certain essential workers, have been met with stiff opposition by employers.  For example, Kroger – one of the largest grocery store operators in the country – announced the closing of two stores in Long Beach as a direct response to that city’s Hero Pay ordinance.  In addition, the California Grocers Association has filed federal lawsuits against the cities of Montebello, Long Beach and Oakland, challenging the constitutionality of the local ordinances and arguing that the laws are preempted by the National Labor Relations Act.  Whether these business closures and lawsuits ultimately affect the viability of these local laws remains to be seen.  But, for now, covered employers must ensure that their pay practices comply with the enhanced wage requirements mandated by these California ordinances. And, as California is often a harbinger of things to come on the employment law front, employers nationwide should be on the alert for similar ordinances in jurisdictions where they do business.