County approves extra pay initiative
New regulation will apply to large grocery stores and pharmacies
Santa Clara County is joining a growing movement of cities and counties across California to require that large grocery stores offer hazard pay to their employees during the coronavirus pandemic.
But because the ordinance is restricted to stores in unincorporated areas of the county, only a small number of workers — if any — will reap any benefits from the new mandate.
The Santa Clara County Board of Supervisors on Tuesday night unanimously passed a law temporarily mandating that large grocery stores in unincorporated areas of the county pay their workers an addi
tional $5 an hour on top of their regular wages to compensate them for continuing to risk contracting coronavirus while on the front lines.
The law, which will take effect in 30 days, applies to grocery stores and pharmacies with more than 300 employees nationwide and at least 15 employees in unincorporated areas of the county. It will last for 180 days or until the county’s COVID-19 public health emergency is terminated, whichever comes sooner.
When asked how many stores would be affected by the new legislation, Santa Clara County Counsel James Williams said he did not have an official count but suspected the number would be “quite small.”
“There aren’t a lot of businesses in unincorporated areas, period, and especially not larger ones that would meet the size threshold,” Williams said in an email. “The ordinance’s main impact is as a model for other jurisdictions to adopt.”
Earlier this month, San Jose became the first city in Santa Clara County to adopt a measure mandating a pay boost for grocery workers, requiring that large grocers pay workers an additional $3 on top of their regular pay. The county plans to provide the rest of the cities in the county with a copy of its newly-passed hazard pay law in hopes that other cities will follow in its footsteps.
Other California cities such as Oakland, Long Beach and Santa Monica all have passed similar laws, and more than a dozen more cities and counties across the state are considering such moves.
But as the push for hazard pay has spread across the state, it has met resistance from business and trade organizations that represent grocers, most notably the California Grocers Association.
The organization, which has filed lawsuits against about half of a dozen California cities that have enacted such laws, contends that the mandatory pay increases will cause grocers to take cost-cutting initiatives to compensate for the additional labor costs. Some of those initiatives, according to the group, could include closing stores, reducing employee hours or passing along the cost to customers by raising the price of goods.
“Extra pay mandates will have severe unintended consequences on not only grocers but on their workers and their customers,” Ron Fong, president & CEO of the California Grocers Association, said in a statement. “A $5/hour extra pay mandate amounts to a 28% increase in labor costs. Grocers will not be able to absorb those costs and negative repercussions are unavoidable.”
Pushback from local chambers of commerce and the state’s restaurant trade union forced Santa Clara County to make a few major alterations to its hazard pay ordinance since it was initially proposed several weeks ago.
The county significantly reduced the number of employees impacted by the law by deciding to only apply it to stores in unincorporated Santa Clara County rather than across all cities in the county. It also dropped a provision of the proposed law that called for applying it to workers in large chain restaurants as well.
In a Feb. 18 newsletter, the region’s largest chamber of commerce — the Silicon Valley Organization — touted its advocacy effort as a reason why the county scaled back its hazard pay proposal.
The amendments, the SVO rejoiced, “means that the ordinance would have almost zero impact on businesses and workers in our community.”
The SVO raised concerns that the new law could cause unintended consequences, such as “making food insecurity worse and eliminating thousands of service jobs in the middle of the pandemic.”
A better solution, the group said, would be to accelerate the vaccination schedule for front line workers, which the county has recently taken steps to do. Beginning Sunday, workers in the food and agriculture sectors, education and child care and emergency services will be able to get vaccinated.