Lawyers predict fight as employers end hazard pay

Companies that began providing temporary hazard pay to front line workers during the pandemic have not announced plans to continue doing so past this month, which might result in increased union activity and other types of backlash from employees, attorneys say.

Spokespersons from Starbucks, Target, and grocery chain Ralphs, which is owned by the Kroger Co., confirmed Wednesday the temporary hazard pay they've provided employees since April is set to expire this month. Ralphs' hourly premium, which was paid weekly, is slated to end mid-May, while Starbucks and Target will continue providing temporary wage increases through the end of May.

State officials began relaxing pandemic restrictions for businesses earlier this month, but Gov. Gavin Newsom has repeatedly said in announcements and social media posts that the coronavirus remains a threat.

"If you provide [hazard pay] to employees to incentivize them to come to work during the virus crisis, and then you take that away before the crisis has really ended -- at least with respect to California -- then I think you're going to face a lot of employee backlash," said Michele Haydel Gehrke, who represents employers as a Reed Smith LLP partner. Employees may feel compelled to organize, call in sick, or take protective leave, Gehrke said.

Wendy Musell, partner at civil rights law firm Stewart & Musell LLP, agreed. "The rates of the infection, if you look at Los Angeles County in particular, and at certain grocery chains in particular, have not changed. They have been on the rise," she said. "A worker who has been receiving hazard pay and suddenly ceases to get it on May 31 may wonder what magically changed on June 1."

Employers faced a great deal of uncertainty when local and state shelter-in-place orders were first rolled out, often with little warning, said Robert R. Roginson, who represents employers at Ogletree, Deakins, Nash, Smoak & Stewart PC and previously was chief counsel for the California Division of Labor Standards Enforcement under Gov. Arnold Schwarzenegger.

"Companies were making on-the-fly decisions to ensure that their operations would be able to continue," Roginson said. "Now that we're getting into more of a less frantic circumstance, the companies are making a determination of ... what's going to be the appropriate way to operate going forward, and perhaps the need for a hazard pay has passed."

If the point of hazard pay was to retain employees who may have been reluctant to continue working during the pandemic, Roginson said, guaranteeing a safe workplace could also serve that purpose. "We're going to be moving more from an essential operations to a safe-to-open standard, which is important," he added. Employers will need to assess how to ensure their workplaces are safe, so that employees are "attracted to work for that employer and continue working for that employer."

Hazard pay for these frontline workers is not required under the state Labor Code, so it would be hard for them to file a complaint against their employer for discontinuing the wage increase unless their employer promised to provide that pay for a specified period of time, and then breached that agreement, Roginson said.

But work stoppages, one-day strikes, and union activity among essential workers have all increased during the pandemic, Gehrke noted. And because federal funding has bolstered unemployment benefits, "some employees may actually make more money by going on unemployment than actually coming into work," Gehrke said. "If an employer doesn't provide hazard pay, then that wage differential could potentially become even greater."

Noting that even non-unionized workers can wage protests, Musell said, "I think we'll see a lot of those organic... worker protests if they're still being required to go to work, they're still not being provided all the safety precautions, and then their pay is cut, when it seems like we're not out of the woods yet."