Some large employers in Portland are giving raises this week to comply with a new $18-an-hour hazard wage supported by voters last month, while others are reducing the number of workers who might qualify for the raise.

And some are simply opting to keep wages as they are, at least until a court rules on the legality and timing of the new ordinance.

Hannaford, the supermarket chain, has already begun paying $18 an hour to employees working in its Portland stores. The University of Southern Maine is adopting a hybrid approach, paying $18 to some workers but telling others they should work remotely to avoid the hazard pay provision.

And MaineHealth, the parent company of Maine Medical Center, says it will not provide the hazard pay to its employees for now given a dispute about when the ordinance takes effect and whether it will be upheld in court.

Meanwhile, the city of Portland itself has more than 700 employees who are paid less than $18 an hour, but the city’s top attorney has said those workers do not qualify for the hazard pay or the future increases to $15 an hour because citizen referendum initiatives can’t affect the wages of city employees.

The citizen referendum approved by voters Nov. 3 raises the city’s minimum wage from $12 to $15 an hour in the coming years, but it also includes a provision requiring a 50 percent bump for hazard pay during declared emergencies, such as the current coronavirus emergency. Employees who physically report to work in Portland are qualified for the hazard pay, while those who work remotely are not.

People First Portland, a political group formed by the Southern Maine Democratic Socialists of America that drafted the ordinance, says Portland employers need to pay hazard pay beginning this week, or they run the risk of being sued for back pay.

However, the city’s attorney says that provision does not take effect until 2022, the same time the ordinance requires the first incremental increase in the regular minimum wage.

And last week, the Portland Regional Chamber of Commerce and five local entities asked a judge to rule that the provision violates state law and the Maine Constitution, and that, if it isn’t struck down, it shouldn’t take effect until 2022.

Now, with the court challenge and the dispute about when it takes effect, each Portland employers is having to chart its own course forward.

Natalie Jones, USM’s vice president of human resources, said in an email to students and workers that regular, temporary and student workers making less than $18 an hour should begin working from home as of this weekend. Facilities and public safety workers are exempt and will earn $18 an hour minimum. Employees will work with their supervisors to receive an exemption from the work-from-home policy, she said.

The plan, which could change with any court decision, will apply to all three USM campuses, including Lewiston and Gorham, even though the ordinance applies only to Portland, Jones said. The move affects 170 hourly regular and temporary employees and 600 student employees, a spokesperson said.

“Unfortunately, there is a great deal of public confusion about the Act’s hazard pay minimum wage requirements, including when they go into effect, and just (Tuesday) a court action was filed to seek clarification on that and other issues,” Jones said. “At USM we have decided to take the following steps for the time being. If a final court action determines that the Act should be applied differently than what we describe below, we’ll make further adjustments and communicate them to you at that time.”

A spokesman for MaineHealth, which opposed the referendum because of the hazard pay provision, said Wednesday the health-care provider will not be increasing wages. The spokesman, John Porter, said MaineHealth will follow the city’s interpretation of the referendum language that the hazard pay provision does not take effect until 2022. The provision would impact between 1,600 and 1,700 employees, he said.

Porter said that hazard pay would “greatly strain” the nonprofit’s budget, which has taken a hit during the pandemic, and would be “unworkable administratively” for a health care system spanning much of Maine and New Hampshire.

“For reasons both philosophical and practical, our organization strongly opposes the provision that would mandate emergency pay during a declared emergency,” Porter said in a written statement. “We do not scale our pay based on how sick or poor a patient may be. It is understood that we are here to provide all in our community excellent patient-centered care at all times. Being forced to provide ’emergency pay’ to select employees in select locations would greatly undermine this shared mission and value.”

Since the election, People First Portland has celebrated the fact that, if hazard pay is implemented this month, Portland would have “the highest minimum wage in the western hemisphere.” The group recently highlighted low wages at Whole Foods, “a multinational corporation owned by the richest man in the world.”

However, the ordinance applies to all Portland businesses, most of which are small businesses and nonprofits. And each business will have to weigh its ability to pay $18 an hour against potential litigation.

Small employers who joined the chamber’s lawsuit cited significant financial impacts in court filings.

Matthew Moran, the owner of Slab and Nosh restaurants, said he would switch to curbside takeout only, reduce overtime and lay off three kitchen employees and four service employees at each location.

And Malory Shaughnessy, executive director of the Alliance for Addition and Mental Health Services, said the group has five members with Portland locations. Unless the state increases reimbursement rates to compensate for the raises, they would would need to reduce hours and lay off employees, which would reduce services. Otherwise, they’re looking to move out of the city, she said.

Mary Alice Scott, director of Portland Buy Local, declined to comment last week about whether her organization had surveyed local businesses about their plans.

The Portland Press Herald/Maine Sunday Telegram reached out to several other corporate employers to see whether they will begin paying $18 an hour beginning Dec. 6.

Hannaford was among the few employers to respond. That company had previously given employees a temporary $1- to $2-an-hour bump in “appreciation pay” from March through June, without relying on grants or other assistance, according to a company spokesman.

The spokesman, Eric Blom, said Hannaford began paying $18 an hour last week to workers at its two Portland locations, but he declined to say how many employees received raises and how much it will cost the company.

“Based on our current understanding of Portland’s new minimum wage ordinance and Maine’s State of Emergency, with the payroll week beginning November 29, Hannaford began a temporary pay increase for any associate at our two Portland stores whose base rate of pay is less than $18 an hour,” Blom said.

A shift supervisor at a Portland Starbucks location was unsure about whether baristas would see a wage increase this week. That individual referred questions to a corporate spokesperson, who did not respond to a request for information.

A spokesperson for Northern Light Mercy Hospital, Ed Gilman, said it was still contemplating what to do. Gilman said the hospital has not instituted any furloughs, pay cuts or layoffs during the pandemic.

“We are still in the process of trying to figure out what our obligations are under Portland’s minimum wage ordinance as amended by the November 3, 2020 referendum,” Gilman said. “Needless to say, we find the measure extremely confusing. Regardless of what we ultimately conclude, however, it is important to point out that throughout the entirety of the pandemic Northern Light Health’s focus has been on our patients and our dedicated employees who care for them.”

Gilman did not respond to questions about how many employees, or their job types, currently earn less than $18 an hour.

Spokespeople for Shaw’s, Trader Joe’s, Whole Foods and McDonald’s did not respond to requests for information.

Meanwhile, there are more than 700 part-time, full-time and seasonal city workers, excluding the schools, who may not receive raises.

Not only has city attorney Danielle West-Chuhta given the opinion that hazard pay is not effective until 2022, she also ruled that the entire minimum wage ordinance does not apply to city workers, since city code prohibits citizen referendums or initiatives from affecting hourly wages of city workers.

When asked last week whether city workers would receive hazard pay, City Hall Communications Director Jessica Grondin referred a reporter to the city’s legal opinion. Asked Friday afternoon whether the city would provide the hazard pay to city workers voluntarily, she said no one was available to say.

Among city employees earning less than $18 an hour are some nurse’s assistants at the city-run Barron Center nursing home and rehabilitation center.

Cindy Pebenito, president of the city’s largest union, the City Employee Benefits’ Association, AFSCME Local 1373, did not respond to interview requests about the union’s position and whether members were concerned about not receiving hazard pay.

Regional union officials declined to comment.

“We’re currently in the process of reviewing the city’s position as well as our options going forward,” said Jim Durkin, director of legislation, political action and communications for AFSCME Council 93. “At this time, we are going to refrain from commenting publicly.”

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