Thousands of workers in Portland will see a temporary increase in pay starting this weekend when a new ordinance goes into effect raising the minimum wage to $19.50 while the city remains under a state of emergency.

The hazard pay ordinance, approved by voters in a citizen-driven referendum in 2020, has drawn concern from some employers who worry about the cost as they continue to struggle through the pandemic. But frontline and essential workers say the hazard pay will provide some relief as they continue to go to work and risk exposure.

But the first test of the new provision – and the wage increase – could be short-lived. The City Council will decide Monday whether to repeal the emergency order, just two days after the wage provision takes effect.

Several councilors expressed support for keeping the order at their last meeting Dec. 20. But that may change now that keeping the order is no longer considered necessary for the city to adopt an indoor mask mandate, which is being considered as a separate ordinance.

Under the ordinance that takes effect Jan. 1, all workers who report to in-person workplaces in the city must be paid a hazard wage of at least 50 percent above the regular minimum wage whenever a state or city emergency is in place.

Mayor Kate Snyder, who has expressed support for removing the emergency order, said it had allowed the city to continue holding remote public meetings. But since the council adopted a remote meeting policy over the summer, it no longer needs a state of emergency.

“Is the continued use of an emergency order to have remote meetings necessary?” Snyder said. “My answer there would be no and therefore we don’t need an emergency order. If we need an emergency order, hazard pay will kick in. For me, what I’m seeing is we don’t need the emergency order and it’s being used in such a way that I don’t think is the intent of the state law with emergency orders.”

City Councilor Mark Dion said he also supports lifting the emergency order.

“I know some will say there are a lot of people in the hospital, but when emergency orders are instituted by governments they’re not designed for the long term, they’re designed for short-term attempts at regaining some stability,” Dion said.

Councilor Roberto Rodriguez, one of six councilors who voted to postpone action on repealing the emergency order last week, said he is waiting until Monday to make a decision. But hazard pay won’t be the most important factor for him, he said.

“I’m trying to really focus not just on an emergency order, but on everything else we will consider Monday, including a mask requirement indoors,” Rodriguez said. “I’m trying to focus everything on the public health perspective and the tools the council has to mitigate the risk of spreading the virus in our community.”

BUSINESS PUSHBACK

The triggering of hazard pay has already sparked pushback from some members of the business community. In a newsletter earlier in the week, the Portland Regional Chamber of Commerce encouraged its members to contact the council and voice support for lifting the order.

“Large chains will be able to absorb the added costs of a $19.50 minimum wage, but small businesses in Portland will not be able to absorb these costs without direct increases in prices or cuts to services and staff,” the chamber wrote. “This strikes directly at our local economic self-reliance and makes it just that much harder for local organizations to compete.”

At MaineWorks, a staffing company that focuses on placing workers in recovery, or who have recently been incarcerated, in construction jobs, Director of Operations Ben Klebe said he is concerned about the ordinance generating pay discrepancies between employees who have job sites in Portland and those working in other communities, as well as whether MaineWorks would be able to return to regular pay rates after the hazard pay has been in effect.

“We’re hoping the City Council will see this is not good for small businesses in Portland,” Klebe said. “If it does come to us needing to pay it, obviously we will do it. We will comply with the city mandate, but we’re hoping the City Council will reconsider.”

Margo Walsh, the company’s founder and owner, said not only would she have to provide pay raises for employees earning less than $19.50, but she would also have to increase the pay of others out of fairness, and the increases would be a financial hardship. Walsh said she supports increasing wages in response to the cost of living, but the hazard pay ordinance is not the right venue. Starting pay at MaineWorks is $15.50 with no experience while the average pay is around $17 per hour.

“When you have a company with variable pay rates, and you start paying the workers with the least skills $19.50, then you have to raise and adjust everyone else commensurate,” Walsh said. “If there’s $4 an hour extra in this new mandate, I have to give everyone an extra $4 an hour. I can’t just lift the bottom guys. That’s not fair.”

Some businesses have already implemented hazard pay even though a court ruling in July found the ordinance wouldn’t take effect until Jan. 1, 2022.

The Portland school board voted in December 2020 to implement a hazard pay of $18 per hour in the school department, which it paid through the end of summer school. The district has not been paying hazard pay this school year but will be implementing the new minimum wage effective Jan. 1 and would stop paying it if it were no longer mandated by the emergency order, Superintendent Xavier Botana said in an email.

The total cost to implement hazard pay last year was not available Thursday, but Botana said he estimates that to pay the emergency wage through the rest of this fiscal year would cost about $560,000. “Since last year’s term was similar that is probably a good estimate of what it cost last year,” he said.

The city of Portland has about 140 employees who make less than $19.50, but under city code, citizen’s initiatives cannot affect city employee wages, said Anne M. Torregrossa, an attorney for the city, in an email. “That said, the city is still evaluating its options with respect to the minimum wage increase,” Torregrossa said.

SOME BUSINESSES ALREADY RAISED WAGES

David’s Restaurant is one business that has been paying hazard pay for about the last year after raising the minimum wage to $18.22, and $9.11 for tipped workers, following the referendum. Chef and owner David Turin said he wanted to follow the will of the voters and also raised the minimum wage at his sister restaurant in South Portland, David’s 388.

But with current costs for masks, COVID tests and sick time adding up, Turin said he is uncertain how his restaurants would manage an increase to a $19.50 minimum wage.

“With the emergency wage, if they put it in, there isn’t anything else we can do, we’ll have to raise our prices,” Turin said.

If the emergency order is lifted, Turin said he plans to continue with the $18.22 minimum wage.

“I believe the market has moved from where we were,” he said. “I don’t know if that’s because of the emergency wage. I don’t think a lot of businesses have continued to pay it … (But) I don’t know if I would have many employees left if I went to the people making $18.22 and said I’m cutting your pay down to $14.75.”

Some large employers in the city, such as MaineHealth and Hannaford, that are not currently paying hazard pay are preparing to comply with the ordinance. MaineHealth has a little over 1,600 employees working in Portland, all earning at least the system-wide minimum of $17 per hour, who would qualify for the pay increase.

“As a large employer, MaineHealth works to ensure that our pay and benefits are competitive and consistent across all of our local service areas, a principle that is violated by a city-specific mandate,” MaineHealth said in a statement. “We support the importance of providing a living wage, and in August we provided our non-executive and non-physician care team members with a special market-adjustment pay increase that totaled $61 million, including an increase in our minimum wage to $17 per hour, a rate that is well above the current minimum wage for the City of Portland and the state.”

Hannaford spokeswoman Ericka Dodge said in an email that the grocery chain is planning to implement a temporary increase for workers earning less than $19.50. Hannaford’s two Portland stores have about 400 employees total, though a breakdown of how many earn less than $19.50 per hour was not available Thursday.

Grocery store workers are among those who have urged the council to keep the order in place.

In written testimony submitted to the council earlier this month, Colleen George said she goes to work each day in a grocery store worried she could contract the virus or bring it home to her family and that some customers have been rude and even aggressive as the pandemic wears on.

“I do not feel safe at work because of the threats that COVID poses,” wrote George, who did not respond to an email seeking an interview. “We are still in a state of emergency, with COVID case numbers going through the roof, and our wages must reflect the stress and danger we put ourselves in each shift.”

Caleb Horton, a former Whole Foods employee who intervened last year in a lawsuit the chamber brought against the city arguing the hazard pay provision was unconstitutional, said the challenges of the pandemic are still present for frontline workers in grocery stores, restaurants and other businesses.

“I think people feel this is what is owed them, not just because of the inherent dangers, stresses and potential loss of life that all Portland frontline workers have been asked to face for almost two years now … but this is also something we voted for and that was passed with a resounding majority,” Horton said. “I think people are thinking, ‘Hey, it’s about time.’ “

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