UPDATED April 25, 2020, 1:40 a.m.: A City Council proposal to provide “hazard pay” to supermarket and other essential workers during the pandemic has grocers warning of store closures and layoffs.
The legislation would require grocers with more than 100 employees to give hourly workers an extra $30 to $75 per shift while the pandemic continues. It is part of a package of bills lawmakers are considering. Some would help small businesses and tenants by giving them more time to pay rent and debts.
The bonuses would not apply to property managers and building service workers, or to independent contractors, but would apply to construction that the state has deemed essential. A general contractor with 100 or more workers doing essential construction would be included, according to City Council Speaker Corey Johnson’s office.
But Avi Kaner, owner of the Morton Williams grocery store chain, said the measure would be “catastrophic to supermarkets,” which have already been squeezed by high rents and competition from national chains. He estimated that the hazard pay would add almost $350,000 to Morton Williams’ payroll, an increase he said the business cannot afford.
“The day it goes into effect, we would immediately close half of our stores and look at the remaining stores very closely to see if we could even keep the doors open,” he said. “We just don’t have the wherewithal — unless the city wants to pay for this mandate.”
Nicholas D’Agostino, owner of D’Agostino Supermarkets, echoed these concerns and stressed that his operating costs have already gone up because of the pandemic.
“I’m having people come in from the outside and clean stores. I’m providing masks for everyone. I’m trying to provide them with PPE,” he said. “It’s not like there aren’t expenses to this whole process.”
“We would like to be in business when this is all over,” he added dryly.
And Richard Lipsky, a lobbyist for the supermarket industry, said the proposal could cause some supermarkets to lay off workers to get under the 100-employee threshold. The Council’s intentions are good, he said, but expressed frustration that the industry was not consulted.
“The fact that they’re putting themselves at risk is definitely heroic,” he said of supermarket employees. “At the same time, you don’t want your heroic workers to be deprived of a job.”
Lipsky also questioned whether the city had the authority to require bonus pay. He said the measure could require state approval or violate federal labor laws.
The bonus-pay bill’s sponsors include Johnson, a likely mayoral candidate next year. Jennifer Fermino, the speaker’s communications director, stressed that the bills had just been introduced and that the Council will consult with businesses and all other stakeholders.
“Right now, you could be working 40 hours a week making minimum wage and earning less than unemployment,” she said in a statement, alluding to the $600-per-week supplement to unemployment benefits that Congress funded through July 31. “The intent is to help workers and make sure that these essential jobs are being filled. We want to hear from businesses to strike the right balance.”
Mayor Bill de Blasio on Friday endorsed the idea of hazard pay, but said it should be provided by federal funding.
“The best way to handle all of this is to do a federal bonus program and this is what Senator [Charles] Schumer has called for, a Hero’s Fund for the frontline workers,” de Blasio said on WNYC radio. “That’s the way I think we can resolve it and that’s going to be decided in May.”
Kaner and D’Agostino both said that they had already reached agreements with their employees to pay them an extra $2 per hour during the pandemic and that they are better positioned than the City Council to determine what their workers need.
“We’ve been taking care of our employees in our own way, and that’s what companies should be able to do,” Kaner said.
“We didn’t need the city’s help to give bonuses to our people,” D’Agostino added.
Representatives for supermarket employee unions Local 338 RWDSU/UFCW and UFCW Local 1500 did not respond to requests for comment.
D’Agostino warned that the proposal could backfire.
“Politicians have all said that they think something needs to be done for people on the frontlines, and I don’t disagree,” he said. “But if you do something that doesn’t make sense, then you’re going to create the opposite of what you think you’re going to create.”