San Mateo is moving forward with a proposed $5 an hour temporary pay increase ordinance for workers for a likely March 1 vote, with support from most of the City Council and unions but opposition from grocery stores.

City Attorney Shawn Mason said the proposed emergency ordinance would apply to large grocery and drugstores with 500 employees nationally, and large stores, like Target, would be subject if 10% of the store space is devoted to selling groceries. Eligible workers are considered “customer-facing employees,” such as those on the floor who interact or are near members of the public. Stores that have collective bargaining agreements that specially address the issue of hazard pay and have agreements on the issue with its workers could be exempt, but Mason said it is unlikely that most agreements would have it at this point given the subject’s recency.

Mollie Stone’s Markets CEO Mike Stone said the San Mateo store, with around 70 employees, is underperforming and was close to operating at a deficit and could be pushed into the red by additional hazard pay, forcing changes. In a letter to Mayor Eric Rodriguez, Stone said hazard pay and other costs could force the company to re-evaluate the San Mateo store’s operations, including operating at a reduced capacity, laying off employees or possibly closing the store.

Wait-and-see

The majority of the City Council supported moving forward with the increase ordinance at its Tuesday meeting, provided a preliminary injunction hearing Friday involving the California Grocers Association against the city of Long Beach upholds hazard pay for grocery workers. If a preliminary injunction is granted against Long Beach, the city will likely reconsider an ordinance. If not, the city will likely continue as planned.

The California Grocers Association has sued various California cities for hazard pay ordinances, and Nate Rose, director of communications with the California Grocers Association, said through email Wednesday that if San Mateo passed an emergency ordinance March 1 for an increase in hazard pay, the organization would take legal action against the city.

City Attorney Shawn Mason said the likelihood of the city being sued could be affected by a judge’s ruling Friday on the preliminary injunction.

“I think if the court rejects the application for a preliminary injunction, several cities are likely to start adopting an ordinance, and that may have an impact on whether the association has the appetite to sue all those cities, but I can’t give you a guarantee that they won’t choose a couple of more, including San Mateo,” Mason said.

Mason said that based on his current legal opinion, the arguments raised in lawsuits against a hazard pay ordinance do not have merit, and the ordinance would be legal if adopted by San Mateo. The emergency ordinance would start March 1 if approved and would expire in 90 days, and a regular ordinance with the same requirements expiring in 120 days would also appear for first reading March 1, second reading and possible adoption March 15, with it going into effect after 30 days. Mason said the city is pursuing two ordinances on a parallel track so that the emergency ordinance can provide immediate help starting March 1 while the regular ordinance goes through its process.

Council stance

Councilwoman Diane Papan brought the topic forward at a Jan. 30 meeting and favored moving quickly to provide immediate help to essential workers. She wants a pay increase of $5 an hour to employees at the large grocery or drugstores with 500 employees or more nationwide. She wanted it ready to go pending the outcome of the preliminary injunction involving Long Beach.

“If you don’t prevail on a preliminary injunction, it is the judge saying, more likely or not; you will not prevail at the time of trial. So, I think that’s a pretty strong indication, given the urgency, that’s what I would tie it to,” Papan said.

Councilman Joe Goethals agreed with Papan and supported an emergency ordinance and an additional regular ordinance, including dialogue with grocers and grocery store employees. Councilwoman Amourence Lee and Deputy Mayor Rick Bonilla both supported an ordinance. Rodriguez said Wednesday he did not have enough detailed information about the ordinance to decide, like how many stores would be affected. He was also concerned the city had not heard enough input from local stores like Piazza’s Fine Foods, Draeger’s Market and Mollie Stone’s Markets. He preferred to take a wait-and-see approach, similar to the Belmont City Council.

Grocer concerns

San Mateo spokeswoman Samantha Weigel said by email Wednesday it was not clear yet how many businesses or employees the ordinance would apply to, as some details need to be resolved. She said staff reached out to some grocers and received initial feedback suggesting a few were already providing employees increased pay.

Stone said no one from city staff has contacted him or reached out to discuss the issue and his concerns, despite being the CEO of a local grocery store operating in the Bay Area since 1986 that would be affected as it has over 500 employees. Stone found out about the potential ordinance through a third party and wrote the letter to the city expressing his concerns. He said the company’s retail employees’ average hourly rate is currently $25.40, higher than the average pay for large grocery store employees. The company also pays health and pension benefits that equal an additional $9.89 per hour per employee and provides two weeks of paid COVID-19 sick leave and two weeks of paid quarantine time if an employee comes into contact with someone with COVID-19. If passed, the cost increase would have substantial effects on his company.

Stone said many of the employees would be inoculated or eligible for the vaccine within the next month and that the company had done everything it could to take care of them.

“I think our company has taken care of our employees extremely well,” Stone said.

Unions in favor

Several public members spoke in favor of an ordinance due to the unprecedented challenges and COVID-19 exposure risk for grocery and drugstore workers. Julie Lind, the executive secretary treasurer for the San Mateo County Central Labor Council, an organization representing over 100 unions in the area, spoke for a pay increase. At the Tuesday meeting, her organization asked for $5 an hour for grocery and drugstore workers in businesses employing 300 workers nationwide applicable to include retail food establishments with 10% or more square footage dedicated to fresh produce, meat or dairy, like Target.

Leon Wong of United Food and Commercial Workers Local 5, which represents Northern California supermarket stockers and retail clerks, said grocery store workers struggle to stay safe at work and face angry customers who refuse to wear face masks.

“I can honestly tell you that it makes a world of difference,” Wong said. “These extra dollars per hour can help them pay bills that they are running behind [on], pay off their debt sooner, help them buy more food for their family, and the list goes on.”

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