Los Angeles County orders additional $5 per hour 'hero pay' for grocery, drug retail workers

Los Angeles County will be requiring grocery and drug retail companies in unincorporated areas of the county to pay frontline workers an additional $5 per hour hazard, or "hero pay," amid the COVID-19 pandemic.

The Los Angeles County Board of Supervisors voted 4-1 in favor of adopting the ordinance, which will take effect immediately and stay in place for the next 120 days.

Supervisor Kathryn Barger cast the dissenting vote, citing unintended consequences and a concern that the ordinance only covers a "small sliver" of the essential workforce.

Supervisors Hilda Solis and Holly Mitchell co-authored the motion calling for the temporary "urgency" ordinance that would apply to store chains that are publicly traded or have at least 300 employees nationwide and more than 10 employees per store.

Solis pointed to store profits as one justification, though she referenced an analysis that includes retailers like Amazon and Home Depot, rather than just grocers and drug retailers. However, some of the national grocers listed, like Kroger and Albertson's, enjoyed even higher profits, according to the Brookings Institution study.

"Grocery and drug retail employees have continued to report to work and serve our communities, despite the ongoing hazards and dangers of being exposed to COVID-19," Solis said. "These workers, many of whom include older adults and single mothers, have put their lives on the line since the beginning of the pandemic to keep our food supply chain running and provide access to medicine our families need. Many are working in fear and without adequate financial support, while their employers continue to see profits grow and top executives receive steep pay bonuses."

Barger questioned whether anyone on the board had done a deep dive into the employers' income statements and shared a statistic from the California Grocers Association pointing to an average annual profit of 2.2%.

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"I have concerns about the unintended consequences that will result from this board directing salaries in the private sector. Stores can pass on additional labor costs to the public through price increases. However, they may also reduce the hours of the impacted workers or decrease the number of employees that they hire," Barger said.

Kroger announced earlier this month that it would shutter two of its Long Beach stores -- a Ralphs location and a Food4Less store -- in response to a Long Beach ordinance requiring a $4 "hero pay'' salary boost for some workers.

RELATED: Ralphs, Food 4 Less to close 25% of Long Beach stores over extra $4 per hour 'Hero Pay' ordinance

Barger said the board had worked hard to fill "food deserts" in unincorporated areas.

"I fear that a mandated 'hero pay' in the unincorporated areas of Los Angeles County will only further exacerbate these concerns," Barger said.

The California Grocers Association has filed federal lawsuits against the cities of Long Beach, West Hollywood and Montebello, seeking to declare hazard pay mandated by those cities as invalid and unconstitutional, contending that grocers will not be able to absorb the additional pay without raising prices, closing stores, reducing hours or laying off employees.

RELATED: California Grocers Association sues Long Beach over 'Hero Pay' for grocery workers

"Extra pay mandates will have severe unintended consequences on not only grocers, but on their workers and their customers,'' CGA President and CEO Ron Fong said. "A $5/hour extra pay mandate amounts to a 28% increase in labor costs. That's huge. Grocers will not be able to absorb those costs and negative repercussions are unavoidable."

The county's emergency ordinance mirrors one approved by the city of Los Angeles, according to Solis.

Workers or business owners seeking additional information can call the Department of Consumer and Business Affairs at 800-593-8222, email
heropay@dcba.lacounty.gov or visit dcba.lacounty.gov/heropay. To find out whether a store is in an unincorporated area of the county, residents can go to lavote.net/precintmap and select "District Map Look Up By Address."

CNS contributed to this report.