Oakland passes emergency ‘hazard pay’ ordinance; grocers must pay workers an extra $5 per hour

OAKLAND — Because they put their lives at risk by interacting with customers all day, front-line employees of large grocery stores in Oakland will get a “hazard” pay raise of $5 an hour until the coronavirus pandemic subsides.

The Oakland City Council unanimously approved an emergency ordinance Tuesday that requires the pay raise to go into effect immediately. In taking that action, Oakland joined Long Beach, Seattle and Santa Monica.

Other cities, including Berkeley and Los Angeles, are considering similar actions, which have been urged by workers and their unions but condemned by the retail grocery industry. Meanwhile, the San Jose City Council on Tuesday night balked at approving the watered-down version of a similar proposal, delaying a vote until next week.

“We can help get the lowest paid essential workers paid at a time when companies are reaping profits,” Oakland Council President Nikki Fortunato Bas, who introduced the ordinance along with Councilmember Noel Gallo, said during Tuesday’s meeting.

The emergency ordinance applies to large grocery stores — which it defines as “15,000 square feet in size … that (sell) primarily household foodstuffs” and employ 500 or more people nationwide. Such stores in Oakland include Cardenas Markets, Safeway/Albertsons, Save Mart, Target, Trader Joe’s and Whole Foods, according to a city memo.

Many grocery stores bumped up workers’ pay in the early months of the pandemic but most stopped doing so after that. Lucky Stores has continued paying hazard pay, and Trader Joe’s announced Monday it would boost its coronavirus-related “thank you” wage increases from $2 to $4 per hour above employees’ base pay. Under the ordinance, it would have to pay its Oakland employees $1 more.

According to a study by the Washington, D.C.-based think tank Brookings Institution, some of the top 13 retail companies in the country saw their profits soar 40% in 2020 over the previous year’s and together earned on average an extra $16.7 billion in profits. At Albertsons Co., which owns the Safeway grocery chain, profits in the first two quarters of 2020 rose a staggering 153% compared with the same period in 2019, according to the report.

Yet, front-line workers saw little of that money. The companies studied by the Brookings Institution raised the wages of their front-line workers by an average of $1.11 per hour since the start of the pandemic.

Workers and their advocates say that needs to change, especially as COVID-19 cases have continued to surge at the highest levels since the start of the pandemic.

Several grocery workers and advocates spoke in favor of the ordinance during Tuesday’s public comment portion, as well as in written statements to Bas’ office.

“Hazard pay means additional pay for performing hazardous duty or work involving physical hardship. Grocery work is now hazardous work and the physical hardship is sickness and death,” said Devin Ramos, a 23-year Oakland Safeway employee. “My work day puts me in a busy store in close contact with hundreds of customers every day, and I have no realistic way of social distancing while performing my job duties. I have no way of having every customer who enters my store wear a mask, or of stopping them from removing their masks.”

Melody Neal, a Lucky employee, emphasized hazard pay is an incentive that helps keep workers coming to a job that has become much more difficult during the pandemic.

“What we usually do one or two times a day, we’re doing three to four times a day. The lines are long. People are frustrated and stressed,” said Neal, 37.

Grocery industry representatives have complained that Oakland’s ordinance and similar ones around the state and country are an overreach and an unfair burden on the retail stores.

“Extra pay mandates will have severe unintended consequences on not only grocers, but on their workers and their customers,” said Ron Fong, president and CEO of the California Grocers Association,. “A $5 (per hour) extra pay mandate amounts to a 28% increase in labor costs. That’s huge. Grocers will not be able to absorb those costs and negative repercussions are unavoidable.”

Fong said grocers would be forced to pass along the extra costs to consumers by raising prices.

In California, it is illegal to increase the price of food items, consumer goods, or medical and emergency supplies by more than 10% of what a seller charged for that item on Feb. 4, 2020, when the pandemic was just beginning.

On Wednesday, the association announced it filed a federal lawsuit against Oakland, as it has done against Long Beach and the city of Montebello, Calif., over similar ordinances. The lawsuits argue the pay ordinances are unconstitutional because they target grocery stores over other industries and interfere with federal labor law that protects the collective bargaining process.

Miya Saika Chen, the council president’s chief of staff, said the ordinance won’t affect employers with collective bargaining agreements that waive its provisions. It also allows employers already offering hazard pay to use that amount as credit toward reaching the $5-per-hour bonus. A store that is currently offering $2 per hour on top of base pay, for instance, would only have to add $3 more.

Oakland’s proposed ordinance would end when the Bay Area is determined by the state to be at a level of “minimal risk,” or the yellow tier, according to California’s color-coded risk assessment model.

Oakland City Administrator Ed Reiskin pointed out during Tuesday’s meeting that the city’s department in charge of enforcing workplace standards does not have the capacity to take on the extra work of answering questions, monitoring compliance with the ordinance and investigating complaints.

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Map: 12,872 new COVID-19 cases and 545 new deaths reported California Chen pointed out that the ordinance has a private right-of-action option, so employees can file a notice in court if their employers violate the ordinance.

Councilmember Gallo cited earlier outbreaks this year at Cardenas Market in Oakland, where multiple employees tested positive for COVID-19, in noting that grocery workers are at higher risk of contracting the disease than those who can work from home.

“We need to recognize the workers, support their health needs and make sure they have the compensation to continue,” he said.