Frontline workers of certain large grocery and pharmacy retailers in Los Angeles County and other municipalities across the state may soon receive an additional $4.00 to $5.00 an hour in “hero pay” or “hazard pay” during the COVID-19 pandemic.

Background

Since March 2020, the COVID-19 pandemic has dramatically impacted our communities.  Low-income communities and communities of color have been hit particularly hard.  Currently, the state is experiencing a record-breaking wave of COVID-19 cases.  Grocery retailers that perform essential work have experienced an increase in outbreaks.  Research suggests that employees with direct customer exposure are five times more likely to test positive for the virus than those without such exposure.

From the outset of the pandemic, some grocery retailers offered an increase in hourly pay to employees, ranging from $2.00 to $4.00, as well as monthly bonuses.  However, at some companies, the pay increases have lapsed.

Los Angeles County Hazard Pay Ordinance

On January 5, 2021, the Los Angeles County Board of Supervisors voted in favor of drafting an ordinance that would require a raise of $5.00 an hour in “hero pay” for frontline workers of certain large grocery and pharmacy retailers during the pandemic.  The motion, put forth by Supervisors Hilda Solis and Holly Mitchel, passed 4 to 1, with Supervisor Kathryn Barger abstaining from the vote.  The motion asks the Acting County Counsel for Los Angeles County to draft an ordinance mandating the pay increase and to determine whether the ordinance could apply to incorporated Los Angeles County.  The Board is expected to consider the draft ordinance at its next regular meeting on January 26, 2021.  If approved, the ordinance is expected to remain in force for 120 days from its effective date.

The Los Angeles County “hero pay” motion cites the following factors: (1) the rising number of outbreaks in grocery stores, (2) increased exposure risk to grocery and drug retail workers who arguably are unable to practice social distancing consistently at work due to large crowds, and (3) perceived psychological distress some frontline grocery and drug retail workers have felt during the pandemic.  The motion also mentions that these frontline workers, who do not have the luxury of working from home to assist any family members with distance learning, have incurred increased childcare costs during the pandemic.

As envisioned, the ordinance will cover grocery stores, convenience stores, liquor stores, and other retail locations in the unincorporated areas of Los Angeles County that sell food or beverage products and have a health permit as a food market retailer issued by the Department of Public Health.  It may also include retail drug stores and retail locations selling groceries covered by the California Retail Food Code.  The ordinance will only apply to corporations that are publicly traded or have at least 300 employees nationwide and more than 10 employees per store site.

Hazard Pay Currently Before Other California Municipalities

The Los Angeles County Board of Supervisors’ efforts mirror similar measures currently under consideration by both the Los Angeles and Long Beach City Councils, as well as the San Francisco Board of Supervisors.

Long Beach

The Long Beach City Council voted unanimously on December 15, 2020 to ask the City Attorney to draft an urgency ordinance for consideration at the next City Council meeting to restore hazard pay to “front-line grocery workers” at a rate of $4.00 per hour.  The proposal exempts grocers with fewer than 300 employees nationally.  If passed, the ordinance would go into effect immediately and expire after 120 days.

The City of Los Angeles

The Los Angeles City Council introduced a similar proposal on December 15, 2020 to ask the City Attorney’s Office to draft an ordinance mandating a $5.00 hourly wage increase for workers at grocery store chains that employ 300 or more workers nationwide.  As envisioned, the ordinance would remain in effect as long as Los Angeles remains under the state’s Purple, Red, or Orange levels of Community Disease Transmission for COVID-19 under State Health Orders.  The motion will be heard in the Council’s Economic Development Committee early this year.

San Francisco

On January 5, 2021, the San Francisco Board of Supervisors also proposed a $5.00 per hour pay increase for grocery store workers in San Francisco for the duration that the City and County of San Francisco remains in the Purple, Red, or Orange COVID-19 designations.  The resolution applies to “Grocery Stores that are considered Formula Retail Establishments in San Francisco,” that is, those with at least 40 locations nationwide.  Unlike the ordinances proposed in Los Angeles and Long Beach, the San Francisco resolution does not mandate hazard pay for grocery workers.  Rather, it merely urges grocery stores to provide hazard pay.

Main Takeaway

Sheppard Mullin will continue monitoring the proposed ordinances in Los Angeles County, the Cities of Long Beach and Los Angeles, and the resolution in San Francisco.  In the meantime, covered employers should prepare to institute pay increases to frontline grocery and pharmacy workers if and when these ordinances pass.

The legal landscape continues to evolve quickly and there is a lack of clear-cut authority or bright line rules on implementation.  This article is not intended to be an unequivocal, one-size fits all guidance, but instead represents our interpretation of where applicable law currently and generally stands.  This article does not address the potential impacts of the numerous other local, state and federal orders that have been issued in response to the COVID-19 pandemic, including, without limitation, potential liability should an employee become ill, requirements regarding family leave, sick pay and other issues.