News form the GCVCC Business Legislative Advocacy Committee

Coachella, CA:  At the February 10th meeting of the Coachella City Council, the body adopted Urgency Ordinance No. 1174, and Ordinance No. 1175, “Hero Pay” for Front-Line Agricultural, Grocery, Restaurant, and Retail Pharmacy Workers.

What is it?

The ordinance requires agricultural operations (including cannabis cultivators), grocery stores, retail pharmacy stores and restaurants to provide additional “hazard pay” of $4.00 per hour to their employees operating within Coachella for at least the next 120 days.

Will it impact my business?

In addition to the business segments listed above, there are additional qualifications that could shield many small businesses within the City from the ordinance.  Specifically, that it only applies to businesses of a certain size.  To be subject to the Ordinance an employer would need to meet BOTH a 300 employee threshold (total employees for the entire company) and 5 employee operating within City limits.

As an example, if a restaurant employs 25 employees within Coachella City limits, but only has a total employee count of 25 for the entire organization, they would not be subject to the ordinance.  If the same restaurant however employs 25 people inside of Coachella City limits, and another 400 people at other locations outside of Coachella (for instance a “chain” corporation operating regionally), their Coachella operation would be subject to the ordinance.

What is the Chambers position on “Hero Pay”?

While the Chamber appreciates the spirit of the ordnance, we have several concerns about the implementation of it.  Among them:

• Because the ordinance is being adopted by a local municipality, it puts businesses within that city at a competitive disadvantage to like businesses in neighboring cities.  Actions such as these are better left to state and federal governments as enforcement is more uniform and maintains regional and national competitive balance (though inequities are often still present with international competition).
• Legislation that is proposed at any level of government that directly impacts the business community should have a fully vetted Financial Impact Study that accompanies it, conducted by the legislative body that is proposing the change (in this case, the city). We have already seen the City of Long Beach lose two grocery stores in the immediate aftermath of that city passing a similar ordinance.
• There should be serious consideration given to exposure to potential litigation and the cost associated with defending it.  The city’s of Long Beach, Oakland and Montebello have enacted some form of “Hero Pay” and are being sued by the California Grocers Association in relation to the action.
• Last, and probably most importantly, we believe cities that are considering actions to better support employees or businesses within their jurisdiction should do so in a collaborative manner with their business community, labor associations and other key community stakeholders.  This requires a thoughtful and inclusive process, not a rushed “emergency action”.

Our letter to the City of Coachella expressing our concerns can be found here: City of Coachella Hero Pay 2-10-21 Council.

The chamber regularly supplies its members with legislative updates as part of their advocacy efforts at the federal, state and local level, for informational purposes only.  As always, members should consult with legal or financial experts on how laws and potential legislation could impact them prior to making related business decisions.