San Leandro, California Enacts ‘Hazard Pay’ Ordinance for Large-Chain Retail Food Workers, Including Retail Drug Stores

On February 16, 2021, the City Council of San Leandro, California, passed an ordinance titled “Retail Food Worker Hazard Pay Ordinance,” which establishes premium pay for retail food workers during the COVID-19 pandemic. San Leandro is an incorporated city located in Alameda County in the San Francisco Bay Area. The ordinance requires large “retail food establishments” to provide their workers with premium pay of $5.00 for each hour worked. The ordinance took effect immediately.

Covered Employers

The ordinance defines covered employers as “[r]etail food establishments … that employ 300 or more employees nationwide.” The ordinance defines “retail food establishment” as a retail store located in San Leandro that is one of the following: (1) “over 15,000 square feet in size and that sells primarily household foodstuffs for offsite consumption”; (2) “over 85,000 square feet and with 10 [percent] of its sales floor area dedicated to sale of non-taxable merchandise[,]” including fresh and prepackaged foods; or (3) a retail drug store that “sells a variety of prescription and nonprescription medicines and miscellaneous items,” including pharmaceuticals, sundries, and food items.

Covered Employees

The ordinance applies to employees who work at least two hours per week in San Leandro and who are entitled to a minimum wage under California law. Although the ordinance does not specifically exclude managers and supervisors, the city attorney has confirmed that the ordinance does not apply to them.

Prohibited Retaliation

The ordinance prohibits employers from taking adverse action against an employee for “exercising rights protected under this [o]rdinance.” Adverse action includes reducing covered employees’ hours or lowering their base wage or holiday pay. The ordinance imposes a rebuttable presumption that the employer retaliated against the employee if it took adverse action against an employee within 90 days of an employee engaging in protected activity.

Posted Notice

The ordinance requires that employers post in a conspicuous worksite location a written notice advising covered employees of their rights under the ordinance. The notice must be posted in “the top three languages spoken in San Leandro as determined by the last U.S. Census.”

Additional Written Information for Employees

In addition to posting a written notice explaining workers’ rights, the ordinance requires employers to provide all employees with “the [e]mployer and owner or manager’s name; address; telephone number; and whether [the store] is part of a chain, integrated enterprise, or franchise associated with a franchisor or network of franchises.”

Record Retention

Under the ordinance, employers must keep records demonstrating compliance for at least four years. If the employer fails to maintain such records and/or to allow the city access to such records, the city will presume that the employer “violated the [o]rdinance, absent clear and convincing evidence otherwise.”

Collective Bargaining Agreements

Collective bargaining agreements can waive the ordinance’s application but only if the agreements explicitly set out the waiver “in clear and unambiguous terms.”

Enforcement

The city may enforce compliance through administrative action. The ordinance also creates a private right of action for covered workers who suffer either financial injury or retaliation because of a violation of the ordinance. The ordinance authorizes treble damages for lost wages and penalties, as well as reasonable attorneys’ fees and costs for employees who successfully pursue such action.

Credit for Employer-Initiated Hazard Pay

Employers that already have implemented hazard pay for covered employees may credit that amount towards the $5.00 hourly premium the ordinance mandates. For example, if an employer already increased wages by $2.00 per hour because of COVID-19, the employer need only increase wages by another $3.00 per hour to comply with the ordinance. Employers must show proof of their hazard pay policy to receive the credit.

Duration of Hazard Pay

The ordinance is in effect until the later of the following: (1) 120 days after the ordinance’s effective date; (2) San Leandro falls within the minimal “yellow” risk level under California State Health Orders; or (3) all covered employees have been vaccinated, excluding covered employees whose disability or sincerely held religious beliefs prevent them from receiving the vaccine.

Ogletree Deakins will continue to monitor and report on developments with respect to the COVID-19 pandemic and will post updates in the firm’s Coronavirus (COVID-19) Resource Center as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.