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Santa Monica Approves Extra Pay for Grocery, Drug Store Workers

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By Jorge Casuso

March 11, 2021 -- Setting the stage for a potential lawsuit, the City Council Tuesday night unanimously approved an urgency ordinance mandating a temporary $5-an-hour pay hike for workers at 24 local grocery and drug stores.

The "hero pay" ordinance covers stores that are publicly traded or employ 300 or more workers nationwide, and have more than ten workers per store.

A total of 72 grocery and drug stores paid Santa Monica City taxes in the third quarter of last year.

“Hero pay is about boosting wages in light of the elevated health risks grocery store and drug store chain employees experience," said Mayor Sue Himmelrich.

These workers face a risk "every time they report to work indoors, interacting with large numbers of people and when they return home to their families,” Himmelrich said.

“This is a much-deserved recognition of the sacrifices these vital essential personnel have endured for the last year.”

Five California cities that have approved similar ordinances -- including Long Beach and West Hollywood -- have been sued by the state's Grocers Association.

The lawsuits claim the ordinances illegally single out a specific industry and certain stores within the industry.

The Association is currently evaluating whether to file lawsuits against Santa Monica, as well as against The City and County of Los Angeles, which approved extra pay ordinances last week, said spokesman Nate Rose.

"All these ordinances are a little different, so we're evaluating them on a case-by-case basis," Rose said.

The Association has warned that extra pay ordinances result in higher food prices, scaled-back hours for workers and store closures ("Hero Pay' Could Backfire, Grocery Industry Says," January 11, 2021).

Hours before Santa Monica approved its measure Tuesday, Kroger Co. announced it would close three grocery stores "because of the costly extra pay grocery store ordinances" approved by the City and County last week.

The announced closures come after the company last month said it would close two Long Beach grocery stores on April 17 due to that City's ordinance ("Two Long Beach Grocery Outlets to Close, Blame Measure Similar to Santa Monica Proposal," February 1, 2021).

“As we said weeks ago, extra pay ordinances will have negative consequences and harm customers and workers,” said Ron Fong, who heads the association.

"It’s a lose-lose all the way around and it is the direct result of elected officials who are passing these unworkable and costly mandates."

Santa Monica Councilmember Kevin McKeown, who sponsored the item, has said he is skeptical the ordinances were the reasons the stores have shuttered.

"I cannot claim any special knowledge or insight regarding retail food circumstances in Long Beach, where Kroger may already have been planning to close their stores and has seized upon ‘hero pay’ as a convenient excuse," he said when the company announced February 1 the stores would close.

“I do know that grocery workers in this pandemic are true heroes who deserve community support for keeping our families fed, and Kroger’s trying to foster pay envy from other essential workers not covered by the Long Beach ordinance is a doubly disrespectful response."

On Tuesday, McKeown reiterated his support, saying that "grocery and drugstore workers have been pandemic heroes for a year."

In addition to grocery and drug stores, Santa Monica's ordinance covers large retail stores of 85,000 square feet or more that dedicate more than 10 percent of their floor space to grocery or drug sales.

The urgency ordinance takes effect immediately but provides a grace period through April 12 for "any liability resulting from nonpayment, so long as all accrued pay is paid by the next pay date after April 12."

The ordinance sunsets in 120 days, at which time it can be extended.

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