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HomeMy WebLinkAbout12 PROPOSED HERO PAY ORDINANCE DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 12 Agenda Item —�� Reviewed: �A�s AGENDA REPORT City Manager Finance Director MEETING DATE: APRIL 20, 2021 TO: MATTHEW S. WEST, CITY MANAGER FROM: DAVID E. KENDIG, CITY ATTORNEY SUBJECT: PROPOSED "HERO PAY' ORDINANCE MANDATING TEMPORARILY INCREASED WAGES FOR GROCERY STORE AND RETAIL DRUG STORE WORKERS. SUMMARY: Consider first reading of an ordinance mandating a temporary $4 increase in hourly wages for grocery and retail drug store workers for a four-month period, or alternatively to adopt a resolution encouraging stores to establish a temporary increase in wages. RECOMMENDATION: That the City Council either: 1. Conduct first reading by title only of Ordinance No. 1513 in the form attached hereto that would establish a temporary increase in wages for grocery store and retail drug store employees for a 120-day period, and direct staff to place the item on the next regular session Council agenda for consideration for adoption; or 2. Adopt attached Resolution 21-30 Encouraging Grocery Stores and Retail Drug Stores to Temporarily Increase Wages for Employees During the Covid-19 Pandemic; or 3. Take no action. FISCAL IMPACT: The ordinance would have minimal direct fiscal impact on the City, as it imposes a wage obligation on private employers. The resolution would have no direct fiscal impact on the City. 1571538.1 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 Agenda Report: Hero Pay Ordinance April 20, 2021 Page 2 BACKGROUND AND DISCUSSION: The COVID-19 pandemic has had drastic impacts on the nation, the State of California, and the City of Tustin. To date, there have been more than 564,747 deaths in the United States attributable to COVID-19, including 59,882 deaths in California and 4,862 in Orange County. Governor Newsom issued several statewide stay-at-home orders during the pandemic to combat rises in COVID-19 infections and strains on hospital capacity. Many non- essential businesses were forced to shut down or operate with strict limitations. However, grocery stores and retail drug stores have remained open since the earliest days of the pandemic, keeping the public supplied with food, medicine, and other essential goods. Workers at these stores are unable to telecommute or work remotely, and have thus faced new hazards at jobs not previously considered dangerous. Grocery workers are in close contact, often within six feet of members of the public who may be COVID-positive but asymptomatic, placing them at higher risk for contracting the disease. Due to increased hazards to their workers, and the need to retain experienced staff, many grocery and retail drug companies provided extra compensation to their employees during the initial months of the pandemic. This "hero pay" often took the form of a temporary wage increase or a one-time bonus. When the pandemic temporarily subsided in the summer of 2020, many retail companies ended hero pay. Despite the surge in cases beginning in winter of 2020, there has been no indication that grocery or retail drug store employers will reinstate the additional compensation provided to their essential workers. Actions by Other Cities Due to the ongoing nature of the pandemic, several cities have adopted ordinances mandating hero pay for grocery and retail drug store workers who must still report to work. These include the cities of Irvine, Santa Ana, Costa Mesa, Long Beach, Pomona, Montebello, Coachella, West Hollywood, Santa Monica, Los Angeles, Berkeley, Daly City, San Leandro, Oakland, and San Jose. Typically, these hero pay ordinances enact a temporary wage increase of$4 to $5 per hour for each hour worked. The Long Beach, Santa Ana, Irvine, and Costa Mesa ordinances largely mimic each other, and provide a model for a potential Tustin ordinance. Each applies to retailers that employ at least a few hundred employees nationally and more than fifteen employees per store within city limits, so that only large retail chains are affected. Each ordinance requires covered entities to provide additional pay of $4 per hour worked for a period of 120 days. Each ordinance provides that retaliation, including a reduction of regular wages or work hours, is prohibited. The above ordinances differ in some respects. For instance, the Santa Ana, Irvine, and Costa Mesa ordinances include retail drug store employees, while the Long Beach ordinance does not. Three of the ordinances define "covered entities" to include retailers 1571538.1 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 Agenda Report: Hero Pay Ordinance April 20, 2021 Page 3 employing 300 or more workers nationally and 15 workers per store within city limits, while Irvine's ordinance covers entities employing more than 500 workers nationally and 20 workers per store. The Costa Mesa and Irvine ordinances include large retail stores that are more than 85,000 square feet and devote 10% or more of their floor space to the sale of food products, such that superstores like Target and Walmart are covered. Nonetheless, these ordinances reflect a local consensus that an additional $4 per hour of "hero pay" for a period of four months is fair compensation for the extra hazards these workers have faced. Proposed Tustin Ordinance — Overview The attached draft ordinance would require payment of Premium Pay of$4.00 per hour by a retail establishment that: • employs at least 15 employees at the establishment in Tustin, and three hundred (300) or more employees nationally; and • any of the following: o devotes seventy percent (70%) or more of its sales floor area to retailing a general range of food products, which may be fresh or packaged, or o receives seventy percent (70%) or more revenue from retailing a general range of food products; or o is a retail pharmacy that sells a variety of prescription and nonprescription medicines, as well as any combination of miscellaneous items, including but not limited to sundries, dry foods, packaged foods, beverages, fresh produce, meats, deli products, dairy products, canned foods, or prepared foods. Passage of a hero pay ordinance along the lines of Santa Ana's or Irvine's would provide extra compensation to an estimated approximately 800 grocery store workers, and approximately 50 retail drug store workers within Tustin city limits. Legal and Other Considerations The California Grocers Association (CGA), an industry trade group, has opposed local hero pay ordinances and has filed legal action against many of the California cities that have passed such ordinances.' At this time, many of the lawsuits are pending. Some affected employers have taken further action. Earlier this year, the Kroger Company announced it would close two of its locations in Long Beach, three locations in Los Angeles, and two locations in Seattle, WA, citing increased labor costs from hero pay ordinances. It is not clear that the hero pay ordinances were the actual cause for the 1 As of the time of this writing, the CGA has filed suit against the cities of Daly City, Irvine, Long Beach, Montebello, San Jose, San Leandro, Santa Ana, Oakland, and West Hollywood. 1571538.1 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 Agenda Report: Hero Pay Ordinance April 20, 2021 Page 4 store closures, or whether these stores were underperforming and slated for closure without regard to the temporary increase in labor costs. Arguments that have been proffered in support of"hero pay" ordinances include the need to address the disparity in working conditions and wages for essential grocery and retail drug store workers in comparison to other essential workers, such as medical staff. Another argument in support is the need to incentivize experienced grocery and retail drug store workers to remain at their jobs, thus ensuring continuity of services to the public during the ongoing pandemic. Arguments against this measure include the possibility that industry groups or employers will file a lawsuit to stop the ordinance, that other groups of employee who are regularly exposed to pandemic-related risks would not covered by the ordinance, and the possibility that a hero pay ordinance could spur store closures. The second alternative in the Staff recommendation (adoption of a Resolution) would not mandate a wage increase but instead would encourage grocery and pharmacy stores to establish the temporary wage increases. Because the proposed Resolution doesn't require wage increases, it would not be subject to the legal challenges outlined above. CONCLUSION: Based on the foregoing, the City Council may wish to consider whether to conduct first reading by title only of Ordinance No. 1513 to establish a temporary increase in wages for grocery store and retail drug store employees for a 120-day period, and direct staff to place the item on the next regular session Council agenda for consideration for adoption. Alternatively, the Council may wish to consider adopting Resolution 21-30 to encourage such wage increases. Attachments: A: Proposed Ordinance No. 1513 B: Proposed Resolution No. 21-30 1571538.1 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 ATTACHMENT A ORDINANCE NO. 1513 AN ORDINANCE OF THE CITY OF TUSTIN ESTABLISHING TEMPORARY PREMIUM PAY FOR GROCERY WORKERS WHEREAS, the City of Tustin, pursuant to its police power, may enact regulations for the public peace, morals, and welfare of the City; and WHEREAS, on March 4, 2020, the Governor declared a State of Emergency in California due to the threat of Coronavirus Disease 2019 ("COVID-19"). On February 26, 2020, the Orange County Board of Supervisors and Department of Public Health declared a public health emergency in Orange County due to COVID-19. Due to directives from federal, state, and local health officials, residents have been ordered to avoid public gatherings and periodically to stay at home to prevent the spread of this disease; and WHEREAS, on March 19, 2020, California Governor Gavin Newsom issued a "Stay Home - Stay Healthy" proclamation closing all non-essential workplaces, requiring people to stay home except to participate in essential activities or to provide essential business services, and banning all gatherings for social, spiritual, and recreational purposes. In addition to healthcare, public health and emergency services, the "Stay Home-Stay Healthy" proclamation identified grocery stores as essential business sectors critical to protecting the health and well-being of all Californians and designated their workers as essential critical infrastructure workers; and WHEREAS, on March 20, 2020, the City Council ratified a Proclamation declaring the existence of a local emergency relating to COVID-19, in accordance with Government Code Section 8630 and Tustin Municipal Code Sections 5204 and 5205(a)(1), and has extended that Proclamation every sixty (60) days since; and WHEREAS, on December 3, 2020, Governor Newsom extended the "Stay Home — Stay Healthy" proclamation; and WHEREAS, on January 25, 2021, Governor Newsom lifted the stay-at-home order, returning California counties back to a "tiered" system; and WHEREAS, as of April 15, 2021, there have been over 60,730 deaths due to COVID-19 in California, including 4,862 deaths in Orange County, with over 6,200 confirmed cases in Tustin; and WHEREAS, the COVID-19 virus has spread broadly throughout California and remains a significant health risk to the community, especially members of our most vulnerable populations; and WHEREAS, grocery and drug retail workers face increased exposure risk due to inability to consistently practice physical distancing in the workplace, with inconsistent 1571541.1 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 access to protective equipment, and are continually in close contact with members of the public; and WHEREAS, frontline grocery and drug retail workers have been unable to work from home, including those with children engaged in distance learning, and have therefore likely incurred additional childcare expenses; and WHEREAS, according to United Food and Commercial Workers Local 324, as of this time, approximately 40 of its members in Tustin have tested positive for COVID-19; which numbers do not account for non-union grocery and retail drug store workers; and WHEREAS, during the early stages of the COVID-19 pandemic, many grocery companies provided "Hero Pay," which was generally implemented as either a temporary hourly wage increase or a one-time bonus for certain essential workers; and WHEREAS, Hero Pay has generally phased out or terminated; however, according to the Brookings Institute, the top retail companies earned on average an extra $16.7 billion in profit in 2020 compared to 2019; and WHEREAS, premium pay, paid in addition to regular wages, is an established type of compensation for employees performing hazardous duty or work involving physical hardship that can cause extreme physical discomfort and distress; and WHEREAS, grocery and drug retail workers working during the COVID-19 pandemic merit additional compensation because they are performing hazardous duty due to the significant risk of exposure to the COVID-19 virus, with grocery and drug retail workers working under these hazardous conditions for months and will continue to face safety risks as the virus presents an ongoing threat for an uncertain period; and WHEREAS, the availability of grocery and drug retail stores is fundamental to the health of the community and is made possible during the COVID-19 emergency because grocery and drug retail workers are on the frontlines of this devastating pandemic supporting public health, safety, and welfare by working in hazardous situations; and WHEREAS, many grocery and drug retail workers have had their higher safety risks exacerbated by lax enforcement of capacity limits and mask requirements in grocery and drug retail stores; and WHEREAS, establishing a requirement for grocery and drug retail stores to provide premium pay to grocery and drug retail workers protects public health, supports stable incomes, and promotes job retention by ensuring that grocery and drug retail workers are compensated for the substantial risks, efforts, and expenses they are undertaking to provide essential services in a safe and reliable manner during the COVID19 pandemic; and 1571541.1 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 WHEREAS, this Ordinance is exempt from the requirements of the California Environmental Quality Act ("CEQA") pursuant to State CEQA Guidelines, as it is not a "project" and has no potential to result in a direct or reasonably foreseeable indirect physical change to the environment because it is merely the formation of an organization. (14 Cal. Code Regs. § 15378(a).) Further, this Ordinance is exempt from CEQA because there is no possibility that this Ordinance or its implementation would have a significant negative effect on the environment. (14 Cal. Code Regs. § 15061(b)(3).) The City Clerk shall cause a Notice of Exemption to be filed as authorized by CEQA and the State CEQA Guidelines. WHEREAS, the City Council has carefully reviewed and considered all of the evidence, including the staff report and public comments presented; and WHEREAS, the City Council finds that this Ordinance is necessary for the preservation of public peace, health, and safety of grocery and retail drug store workers working in Tustin. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF TUSTIN DOES ORDAIN AS FOLLOWS: SECTION 1. ADOPTION OF TEMPORARY PREMIUM PAY FOR GROCERY WORKERS. A. DEFINITIONS. For purposes of this Ordinance, the following definitions apply. 1. "Adverse action" means reducing compensation, garnishing gratuities, temporarily or permanently denying or limiting access to work, incentives, or bonuses, offering less desirable work, demoting, terminating, deactivating, placing on hold status, failing to rehire after a seasonal interruption of work, threatening, penalizing, retaliating, or otherwise discriminating against a grocery worker. "Adverse action" may involve any aspect of employment, including pay, work hours, responsibilities, or other material change in the terms and condition of employment. 2. "Aggrieved party" means a grocery worker or other person who suffers tangible or intangible harm due to a covered employer or other person's violation of this Ordinance. 3. "Base wage rate" means the regular hourly wage rate paid to a grocery worker. 4. "City" means the City of Tustin. 5. "Grocery worker" means an individual who performs at least two (2) hours of work in a calendar week for a covered employer within the City of Tustin, but does not include managerial, supervisory, or confidential employees of a covered employer. 1571541.1 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 6. "Covered employer" means any retail establishment, as defined herein, that is located in the City of Tustin, employs at least 15 employees at the retail establishment, and whose owner, parent company, franchisor or network of franchises employs three hundred (300) or more employees nationally. For purposes of this definition, all employees who worked for compensation shall be counted, including but not limited to (a) employees who are not covered by this Ordinance; and (b) employees who worked in full-time employment, part-time employment, joint employment, temporary employment, or through the services of a temporary services or staffing agency. 7. "Hour worked" means the time during which a grocery worker is subject to the control of a covered employer, including any time that the employee is suffered or permitted to work or on-call. 8. "Person" means any individual, corporation, partnership, limited partnership, limited liability partnership, limited liability company, business trust, estate, trust, association,joint venture, agency, instrumentality, or any other legal or commercial entity, whether domestic or foreign. 9. "Premium pay" means an additional $4.00 per hour wage premium for each hour worked that is in addition to a grocery worker's base pay rate and any commissions, gratuities, bonuses or any other form of regular or premium pay that is owed to the grocery worker, including but not limited to any holiday, overtime, or vacation pay. 10. "Retail establishment" means a retail establishment located in the City of Tustin that: (a) (i) devotes seventy percent (70%) or more of its sales floor area to retailing a general range of food products, which may be fresh or packaged, or (ii) receives seventy percent (70%) or more revenue from retailing a general range of food products; or (b) is a retail pharmacy that sells a variety of prescription and nonprescription medicines, as well as any combination of miscellaneous items, including but not limited to sundries, dry foods, packaged foods, beverages, fresh produce, meats, deli products, dairy products, canned foods, or prepared foods. B. PREMIUM PAY REQUIREMENT. 1. Each covered employer shall pay each grocery worker premium pay consisting of an additional four dollars ($4.00) per hour for each hour worked. 2. Covered employers shall provide the premium pay required for a minimum of one hundred twenty (120) days from the effective date of this Ordinance. 3. A covered employer that was providing hazard pay to grocery workers at a rate of $1.00 or more per hour as of the effective date of this Ordinance, and that continues to provide such hazard pay at the same rate while this Article is in effect, may credit the amount of such hourly hazard pay for each hour worked by a grocery worker towards meeting its obligations under this Ordinance. 1571541.1 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 C. GROCERY WORKER PROTECTIONS. 1. It shall be unlawful for a covered employer to take any of the following actions, as a result of this Ordinance going into effect: (a) Reduce a grocery worker's compensation; or (b) Limit a grocery worker's earning capacity. 2. A covered employer violates the prohibition if the requirements of this Ordinance are a motivating factor in the covered employer's decision to take any adverse action, unless the covered employer proves that it would have taken the same action at the time that it did irrespective of the Ordinance's operation. D. NOTICE OF RIGHTS. Each covered employer shall provide grocery workers with a written notice of rights established by this Ordinance in a form published by City. The notice of rights shall be in a form and manner sufficient to inform grocery workers of their rights under this Ordinance. The notice of rights shall provide information on: (a) The right to premium pay guaranteed by this Ordinance; (b) The right to be protected from retaliation for exercising in good faith the rights protected by this Ordinance; and (c) The right to bring a civil action for a violation of the requirements of this Ordinance, including a covered employer's denial of premium pay as required by this Ordinance and a covered employer's or other person's retaliation against a grocery worker or other person for asserting the right to premium pay or otherwise engaging in an activity protected by this Ordinance. Covered employers shall post the notice of rights required in a conspicuous location, and in an electronic format that is readily accessible to the grocery workers, including smartphone application or online web portal. The notice shall be in English, Spanish, and any other primary language spoken by at least 10% of the employees of a covered employer's retail establishment. E. RECORD KEEPING. 1. Covered employers shall retain records that document compliance with this Ordinance, including payroll records listing the premium pay required by this Ordinance as a separate item, for a period of two years. 2. If a covered employer fails to retain adequate records required herein, there shall be a presumption, rebuttable by clear and convincing evidence, that the covered employer violated this Ordinance for each grocery worker for whom records were not retained. F. RETALIATION PROHIBITED. No covered employer shall discharge, reduce compensation for, or take any other adverse action against a grocery worker for opposing any practice proscribed by this Ordinance, for participating in proceedings related to this Ordinance, for seeking to exercise their rights under this Ordinance, or for otherwise asserting rights under this Ordinance. The protections of this Ordinance shall apply to any 1571541.1 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 grocery worker who mistakenly, but in good faith, alleges non-compliance with this Ordinance. G. VIOLATION. The failure of any person to comply with any requirement imposed on it under this Ordinance is a violation. H. CIVIL ENFORCEMENT AND REMEDIES. 1. The remedies provided for in this Ordinance are cumulative and are not intended to be exclusive of any other available remedies, damages, penalties, fines, or relief. 2. Any grocery worker aggrieved by a violation of this Ordinance may bring a civil action in a court of competent jurisdiction against the covered employer or other person violating this Ordinance and, upon prevailing, shall be awarded reasonable attorneys' fees and costs and such legal or equitable relief as may be appropriate to remedy the violation including, without limitation, the payment of any unpaid compensation due under this Ordinance plus interest, back pay, reinstatement, front pay in lieu of reinstatement, and rescission. 3. In addition to any other remedies set forth in this Ordinance, a person that acts with malice, fraud, or oppression in violating a grocery worker's rights shall be liable for exemplary damages in the amount of two times the monetary damages suffered by the aggrieved grocery worker. I. ENCOURAGEMENT OF MORE GENEROUS POLICIES. 1. Nothing in this Ordinance shall be construed to discourage or prohibit a covered employer from the adoption or retention of premium pay policies more generous than the one required herein. 2. Nothing in this Ordinance shall be construed as diminishing the obligation of a covered employer to comply with any contract or other agreement providing more generous protections to a grocery worker than those required by this Ordinance. SECTION 2. MINIMUM REQUIREMENTS. This Ordinance provides minimum requirements for premium pay while working for a covered employer and shall not be construed to preempt, limit, or otherwise affect the applicability of any other law, regulation, requirement, policy, or standard that provides for premium pay, or that extends other protections to grocery workers. Nothing in this Ordinance shall be interpreted or applied so as to create any power or duty in conflict with federal or state law. Nothing in this Ordinance shall be construed as restricting a grocery worker's right to pursue any other remedies at law or equity for violation of their rights. SECTION 3. The City Council finds this Ordinance to be necessary to protect the public peace, health, or safety. The City Council finds and determines there is a need to adopt the provisions of this Ordinance in order to reduce the risk that grocery and retail drug store workers will leave their employment due to lack of adequate compensation for taking 1571541.1 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 on that additional risk. Requiring grocery stores to provide premium pay to grocery workers compensates grocery workers for the risks of working during a pandemic. Grocery workers face magnified risks of catching or spreading the COVID-19 disease because the nature of their work involves close contact with the public, including members of the public who are not showing symptoms of COVID-19 but who can spread the disease. The provision of premium pay better ensures the retention of these essential workers who are on the frontlines of this pandemic providing essential services and who are needed throughout the duration of the COVID-19 emergency. As such, they are deserving of fair and equitable compensation for their work. SECTION 4. Term. This Ordinance shall remain in effect for a period of 120 days after its effective date. SECTION 5. Uncodified Ordinance. This Ordinance shall not be codified in the Tustin City Code. SECTION 6. Inconsistences. Any provision of the Tustin City Code or appendices thereto inconsistent with the provisions of the Ordinance, to the extent of such inconsistencies and no further, are suspended or modified to that extent necessary to effect the provisions of this Ordinance, but only during the term of this Ordinance. SECTION 7. Severability. If any chapter, article, section, subsection, subdivision, sentence, clause, phrase, word, or portion of this Ordinance, or the application thereof to any person, is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portion of this Ordinance or its application to other persons. The City Council hereby declares that it would have adopted this Ordinance and each chapter, article, section, subsection, subdivision, sentence, clause, phrase, word, or portion thereof, irrespective of the fact that any one or more subsections, subdivisions, sentences, clauses, phrases, or portions of the application thereof to any person, be declared invalid or unconstitutional. No portion of this Ordinance shall supersede any local, state, or federal law, regulation, or codes dealing with life safety factors. SECTION 8. Certification. The City Clerk shall certify to the passage and adoption of this Ordinance as required by law. PASSED, APPROVED AND ADOPTED this 20th day of April, 2021. LETITIA CLARK, MAYOR ATTEST: ERICA N. YASUDA, CITY CLERK 1571541.1 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF TUSTIN ) CERTIFICATION FOR ORDINANCE NO. 1513 Erica N. Yasuda, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, does hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Ordinance No. 1513 was duly passed, and adopted at a regular meeting of the Tustin City Council held on the 20th day of April, 2021, by the following vote: COUNCILPERSONS AYES: COUNCILPERSONS NOES: COUNCILPERSONS ABSTAINED: COUNCILPERSONS ABSENT: Erica N. Yasuda, City Clerk 1571541.1 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 ATTACHMENT B RESOLUTION NO. 21-30 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN ENCOURAGING GROCERY STORES AND RETAIL DRUG STORES TO TEMPORARILY INCREASE WAGES FOR EMPLOYEES DURING THE COVID-19 PANDEMIC. The City Council of the City of Tustin finds: WHEREAS, on March 4, 2020, the Governor declared a State of Emergency in California due to the threat of Coronavirus Disease 2019 ("COVID-19"). On February 26, 2020, the Orange County Board of Supervisors and Department of Public Health declared a public health emergency in Orange County due to COVID-19. Due to directives from federal, state, and local health officials, residents have been ordered to avoid public gatherings and periodically to stay at home to prevent the spread of this disease; and WHEREAS, on March 19, 2020, California Governor Gavin Newsom issued a "Stay Home - Stay Healthy" proclamation closing all non-essential workplaces, requiring people to stay home except to participate in essential activities or to provide essential business services, and banning all gatherings for social, spiritual, and recreational purposes. In addition to healthcare, public health and emergency services, the "Stay Home-Stay Healthy" proclamation identified grocery stores as essential business sectors critical to protecting the health and well-being of all Californians and designated their workers as essential critical infrastructure workers; and WHEREAS, on March 20, 2020, the City Council ratified a Proclamation declaring the existence of a local emergency relating to COVID-19, in accordance with Government Code Section 8630 and Tustin Municipal Code Sections 5204 and 5205(a)(1), and has extended that Proclamation at least every sixty (60) days since; and WHEREAS, on December 3, 2020, Governor Newsom extended the "Stay Home — Stay Healthy" proclamation; and WHEREAS, on January 25, 2021, Governor Newsom lifted the stay-at-home order, returning California counties back to a "tiered" system of pandemic-related restrictions on businesses and activities; and WHEREAS, as of April 15, 2021, there have been over 60,730 deaths due to COVID-19 in California, including 4,862 deaths in Orange County, with over 6,200 confirmed cases in Tustin; and WHEREAS, the COVID-19 virus has spread broadly throughout California and remains a significant health risk to the community, especially members of our most vulnerable populations; and Resolution No. 21-30 Page 1 of 6 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 WHEREAS, grocery and drug retail workers face increased exposure risk due to inability to consistently practice physical distancing in the workplace, with inconsistent access to protective equipment, and are continually in close contact with members of the public; and WHEREAS, frontline grocery and drug retail workers have been unable to work from home, including those with children engaged in distance learning, and have therefore likely incurred additional childcare expenses; and WHEREAS, according to United Food and Commercial Workers Local 324, as of this time, approximately 40 of its members in Tustin have tested positive for COVID-19; which numbers do not account for non-union grocery and retail drug store workers; and WHEREAS, during the early stages of the COVID-19 pandemic, many grocery companies provided "Hero Pay," which was generally implemented as either a temporary hourly wage increase or a one-time bonus for certain essential workers; and WHEREAS, Hero Pay has generally phased out or terminated; however, according to the Brookings Institute, the top retail companies earned on average an extra $16.7 billion in profit in 2020 compared to 2019; and WHEREAS, premium pay, paid in addition to regular wages, is an established type of compensation for employees performing hazardous duty or work involving physical hardship that can cause extreme physical discomfort and distress; and WHEREAS, grocery and drug retail workers working during the COVID-19 pandemic merit additional compensation because they are performing hazardous duty due to the significant risk of exposure to the COVID-19 virus, with grocery and drug retail workers working under these hazardous conditions for months and will continue to face safety risks as the virus presents an ongoing threat for an uncertain period; and WHEREAS, the availability of grocery and drug retail stores is fundamental to the health of the community and is made possible during the COVID-19 emergency because grocery and drug retail workers are on the frontlines of this devastating pandemic supporting public health, safety, and welfare by working in hazardous situations; and WHEREAS, many grocery and drug retail workers have had their higher safety risks exacerbated by lax enforcement of capacity limits and mask requirements in grocery and drug retail stores; and WHEREAS, encouraging grocery and drug retail stores to provide premium pay to grocery and drug retail workers protects public health, supports stable incomes, and promotes job retention by ensuring that grocery and drug retail workers are compensated Resolution No. 21-30 Page 2 of 6 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 for the substantial risks, efforts, and expenses they are undertaking to provide essential services in a safe and reliable manner during the COVID19 pandemic; and WHEREAS, this Resolution is exempt from the requirements of the California Environmental Quality Act ("CEQA") pursuant to State CEQA Guidelines, as it is not a "project" and has no potential to result in a direct or reasonably foreseeable indirect physical change to the environment because it is merely the formation of an organization. (14 Cal. Code Regs. § 15378(a).) Further, this Resolution is exempt from CEQA because there is no possibility that this Resolution or its implementation would have a significant negative effect on the environment. (14 Cal. Code Regs. § 15061(b)(3).) The City Clerk shall cause a Notice of Exemption to be filed as authorized by CEQA and the State CEQA Guidelines. WHEREAS, the City Council has carefully reviewed and considered all of the evidence, including the staff report and public comments presented; and WHEREAS, the City Council finds that this Resolution will assist in preserving public peace, health, and safety of grocery and retail drug store workers working in Tustin. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Tustin: SECTION 1. ENCOURAGING ADOPTION OF TEMPORARY PREMIUM PAY FOR GROCERY WORKERS. A. DEFINITIONS. For purposes of this Resolution, the following definitions apply. "Base wage rate" means the regular hourly wage rate paid to a grocery worker. "City" means the City of Tustin. "Grocery worker" means an individual who performs at least two (2) hours of work in a calendar week for a covered employer within the City of Tustin, but does not include managerial, supervisory, or confidential employees of a covered employer. "Covered employer" means any retail establishment, as defined herein, that is located in the City of Tustin, employs at least 15 employees at the retail establishment, and whose owner, parent company, franchisor or network of franchises employs three hundred (300) or more employees nationally. For purposes of this definition, all employees who worked for compensation shall be counted, including but not limited to (a) employees who are not covered by this Resolution; and (b) employees who worked in full-time employment, part-time employment, joint employment, temporary employment, or through the services of a temporary services or staffing agency. "Hour worked" means the time during which a grocery worker is subject to the control of a covered employer, including any time that the employee is suffered or permitted to work or on-call. Resolution No. 21-30 Page 3of6 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 "Person" means any individual, corporation, partnership, limited partnership, limited liability partnership, limited liability company, business trust, estate, trust, association,joint venture, agency, instrumentality, or any other legal or commercial entity, whether domestic or foreign. "Premium pay" means an additional $4.00 per hour wage premium for each hour worked that is in addition to a grocery worker's base pay rate and any commissions, gratuities, bonuses or any other form of regular or premium pay that is owed to the grocery worker, including but not limited to any holiday, overtime, or vacation pay. "Retail establishment" means a retail establishment located in the City of Tustin that: (a) (i)devotes seventy percent (70%) or more of its sales floor area to retailing a general range of food products, which may be fresh or packaged, or (ii) receives seventy percent (70%) or more revenue from retailing a general range of food products; or (b) is a retail pharmacy that sells a variety of prescription and nonprescription medicines, as well as any combination of miscellaneous items, including but not limited to sundries, dry foods, packaged foods, beverages, fresh produce, meats, deli products, dairy products, canned foods, or prepared foods. B. PREMIUM PAY. 1. Each covered employer is encouraged to pay each grocery worker premium pay consisting of an additional four dollars ($4.00) per hour for each hour worked. 2. Covered employers are encouraged to provide the premium pay required for at least one hundred twenty (120) days from the effective date of this Resolution. C. ENCOURAGEMENT OF MORE GENEROUS POLICIES. 1. Nothing in this Resolution shall be construed to discourage or prohibit a covered employer from the adoption or retention of premium pay policies more generous than the one encouraged herein. 2. Nothing in this Resolution shall be construed as diminishing the obligation of a covered employer to comply with any contract or other agreement providing more generous protections to a grocery worker than those encouraged by this Resolution. SECTION 2. This Resolution shall not be construed to preempt, limit, or otherwise affect the applicability of any other law, regulation, requirement, policy, or standard that provides for premium pay, or that extends other protections to grocery workers. Nothing in this Resolution shall be interpreted or applied so as to create any power or duty in conflict with federal or state law. Nothing in this Resolution shall be construed as restricting a grocery worker's right to pursue any other remedies at law or equity for violation of their rights. Resolution No. 21-30 Page 4of6 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 SECTION 3. The City Council finds this Resolution will help to protect the public peace, health, or safety. The City Council finds and determines there is a need to adopt the provisions of this Resolution in order to reduce the risk that grocery and retail drug store workers will leave their employment due to lack of adequate compensation for taking on that additional risk. Encouraging grocery stores to provide premium pay to grocery workers compensates grocery workers for the risks of working during a pandemic. Grocery workers face magnified risks of catching or spreading the COVID-19 disease because the nature of their work involves close contact with the public, including members of the public who are not showing symptoms of COVID-19 but who can spread the disease. The provision of premium pay better ensures the retention of these essential workers who are on the frontlines of this pandemic providing essential services and who are needed throughout the duration of the COVID-19 emergency. As such, they are deserving of fair and equitable compensation for their work. SECTION 4. Term. This Resolution shall remain in effect for a period of 120 days after its adoption. SECTION 5. No portion of this Resolution shall supersede any local, state, or federal law, regulation, or codes. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin held on the 20th day of April 2021. LETITIA CLARK Mayor ATTEST: ERICA N. YASUDA City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) I, Erica N. Yasuda, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, do hereby certify that the whole number of the members of the City Council is five; that the above and foregoing Resolution No. 21-30 was duly and regularly passed and adopted at a regular meeting of the City Council held on the 20th day of April, 2021 by the following vote: Resolution No. 21-30 Page 5of6 DocuSign Envelope ID:25726A5D-5A85-4316-81 B9-787CBCF7ED77 COUNCILPERSONS AYES: COUNCILPERSONS NOES: COUNCILPERSONS ABSTAINED: COUNCILPERSONS ABSENT: ERICA N. YASUDA City Clerk Resolution No. 21-30 Page 6 of 6