Businesses Don't Know Whether To Delay Hazard Pay Under Portland's New Provision

Nov 17, 2020

Portland employers face a costly dilemma in a dispute over the effective date of a “hazard-pay” boost in the city’s minimum wage. And rather than risk an expensive legal fight they might lose, some are already deciding to pare back staff or hike prices for customers.

City voters this month approved the bonus for people who continue in-person work during a publicly declared emergency.

In the course of the pandemic, it would raise the city’s minimum wage by 50 percent, to $18 an hour. Labor law experts say that if employers don’t start paying that rate as soon as next month, they could be held liable for triple damages plus legal fees.

“They’re between a rock and a hard place,” Attorney Jim Erwin told an online forum of the Portland Regional Chamber of Commerce Tuesday morning.

Erwin said that the effective date of the hazard-pay measure is open to several interpretations. They range from 30 days after the election, which is Dec. 5, to the date of a voter-approved increase in the general minimum wage, in Jan. 2022.

Erwin added that businesses could ask the Maine Supreme Court for a declaratory ruling.

“And that could go to the law court on an expedited basis. You’re still talking 60-90 days at the very least,” he said.

Some employers say they can’t afford to risk a wait-and-see approach and potentially face legal damages. Matt Moran, co-owner of the downtown restaurants Slab and Nosh, said with cold coming and the pandemic keeping more people at home, he won’t be able to keep up his usual winter employment levels.

“So our focus right now is potentially move to a straight take-out menu, which would mean laying off up to nine employees out of 15 at this point,” he said.

Other employers say they will try to keep up their staffing levels, but that will mean passing on some costs.

“We have no place else to go, other than parent tuition,” said Lori Moses, child care director at the Catherine Morrill Day Nursery, a Portland nonprofit day care center.

Moses said the hazard pay will cost the organization about $2,500 a week.

“We have no choice but to pass this burden on to families. And some families won’t be able to afford it, and then they won’t be working. So we are the workforce behind the workforce. If child care closes its doors then that will have a ripple effect on employees who won’t be able to work,” she said.

The minimum wage measures were part of a package of progressive items city voters approved that were originated by members of the Democratic Socialists of America through a local committee called People First Portland. Organizer Kate Sykes acknowledged that the new situation may have some negative consequences. But she said it’s necessary.

“I think that what we’re looking at is this ordinance has interrupted a race to the bottom,” she said.

Sykes is calling on the city council to meet with her group to jointly seek solutions, including ways to provide some sort of gap assistance to help keep people employed. Reducing police budgets, she said, could free up funds, for instance, to provide “free” child care.

“We’ve been punching down for so long, the business community has been taking it out of the hides of the workers for so long, that they can’t see the logic in actually looking to the state and looking to the feds and demanding those kinds of bailouts, if you will, for working-class people,” Sykes said.

In addition to seeking a court ruling, the chamber’s experts say employers could urge the city council to call a special election to ask voters to clarify the effective date of the hazard pay requirement. But even that would take months.

Meanwhile, Erwin said, employers should avoid talking together on any joint agreement to pay less than the law might require, because that could open them to antitrust charges.