Chamber sues to stop hazard pay provision approved by Portland voters

The Portland Regional Chamber of Commerce is asking a judge to rule that a voter-approved measure to require a minimum wage of $18 an hour for Portland workers during declared emergencies violates both the Maine Constitution and city ordinances.

The lawsuit, filed Tuesday, would seek to short-circuit the “hazard pay” provision in a broader citizen initiative to raise the city’s minimum wage. The initiative passed with more than 60 percent approval on Nov. 3.

Chamber officials said a provision in the measure that increases the city’s minimum wage by an additional 50 percent for people who report to Portland workplaces during declared emergencies is not sustainable, and not legal.

The suit filed Tuesday would not affect the broader minimum wage measure, which calls for a gradual increase from $12 to $15 an hour starting in January 2022. After the election, city officials debated when the so-called hazard pay provision would take effect, ultimately determining that it will not kick in until January 2022.

Backers of the measure say the emergency pay provision kicks in 30 days after the results were certified, or Dec. 6. Under that interpretation, qualified Portland workers should get paid at least $18 an hour starting on Sunday because of the ongoing coronavirus emergency.

The conflicting interpretations have left Portland employers to decide whether to raise pay to $18 next week, or risk being sued by minimum wage employees.

The chamber’s lawsuit asks that if the emergency pay provision is not thrown out, the judge rules that it doesn’t take effect until January 2022 when the the rest of the voter-adopted ordinance kicks in.

John Aromando, the lawyer representing the chamber and five businesses in the suit, said it’s unlikely a judge will rule this week, but he said the suit asks the court to set an expedited schedule to take up the challenge so businesses aren’t left uncertain about whether they have to pay the higher emergency wages.

Aromando declined to say what advice he would give businesses about the higher pay in the meantime, but did note that it’s possible workers could sue their employer if the hazard pay is not paid after the Dec. 6 effective date of the new law.

The suit says the measure violates both the state constitution and Portland’s own ordinances regarding what issues can be put before voters in a referendum.

In addition to the chamber, the suit was filed on behalf of two Portland restaurants, Nosh and Slab; the Gritty McDuff’s brew pub; Play it Again Sports; and the Alliance for Addiction and Mental Health Services.

In a statement, People First Portland – the group that was the main proponent of the measure – said Tuesday that the chamber decided to send in “well-heeled lawyers to undermine the will of the voters and defend low wages” in the middle of a spike of COVID-19 deaths in Maine.

“While we risk our lives for wages that don’t buy enough groceries to last the week, cover our health care bills, or even stay at home when we have to quarantine, the Chamber of Commerce is going to court to fight for the international stockholders of big box stores, fast food franchises, and other corporate chains and to protect the multimillion dollar salaries of private health insurance executives,” the statement said, vowing “to fight, and win, at the ballot box, on the shop floor, in the streets, and in the courts.”

The nonprofit Alliance for Addiction and Mental Health Services is based in Augusta but has Portland-based members that would be subject to the new minimum wage law. It released a statement Tuesday saying that its members may cut employee hours, reduce services or move out of Portland if the emergency pay provision stays in place.

Malory Shaughnessy, executive director of the alliance, said the organization and its members believe workers deserve a livable wage that “provides compensation for the hazards they face every day.”

But, she said, the agencies are compensated by the state under formulas that use “outdated wage rates” that won’t be increased if Portland’s minimum wages are increased.

Shaughnessy said her group has lobbied for years to get the Legislature to increase reimbursement rates so they can hike wages and retain workers, but “this quick ramp up to the new emergency wage rate is going to prove to be a hardship that may be impossible to overcome for many of these nonprofit providers.”

The Maine Center for Economic Policy, a left-leaning research and advocacy group, has said that as many as 23,500 Portland workers could see a wage increase under the new ordinance, including 14,000 workers now making less than $15 an hour. The state’s current minimum wage is $12 an hour.

The minimum wage would rise to $15 an hour by 2024 under the Portland measure, meaning that pay during a declared emergency would eventually be $22.50 an hour.

The chamber had opposed the measure, saying many employers can’t afford the increased pay mandated under the referendum. Their opposition included the slogan “We can’t do $22,” a reference to the minimum wage during a declared emergency after wages are increased under the measure.