Some employers won't wait to pay Portland's new hazard wage - Press Herald

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At least some Portland employers said they will enact an emergency, $18-per-hour minimum wage in the city next month to avoid potentially costly lawsuits, which could involve paying triple damages to underpaid staff if a court ruled in their favor.

The businesses indicated they would pay the higher “hazard” minimum wage, approved by voters this month via referendum, even after the Portland City Council said that, based on its own legal interpretation, the resulting ordinance is not enforceable until 2022. Under the ordinance, the city’s minimum wage is automatically boosted to 1.5 times the normal minimum wage when the city is under an emergency declaration, as it is currently because of the coronavirus pandemic.

“It is dire and I know that our board is not going to take the risk of getting sued – we can’t afford it,” said Lori Moses, executive director of the nonprofit Catherine Morrill Day Nursery.

A sudden jump in the minimum wage will require her organization to increase pay for some employees and stretch its resources beyond their limit, Moses said during a panel discussion hosted by the Portland Regional Chamber of Commerce Tuesday. Because tuition reimbursement from the state will not grow to match the wage increase, the money will have to come from price increases on parents who pay full price, she said.

“It is going to be devastating,” she said. “Unless there is some kind of gap funding or emergency funding, the only other avenue is (raising) parent tuition.”

Conflicting interpretations of the minimum wage ordinance, endorsed by 62 percent of Portland voters, leaves employers in a bind, said James Erwin, a labor attorney at Portland law firm Pierce Atwood, during the panel discussion.

The ordinance, put on the ballot by political action committee People First Portland, increases the minimum wage in the city by $1 per hour starting in 2022, up to $15 an hour in 2024.

It also requires employers with a place of business in the city to pay employees time and a half during a declared emergency such as the coronavirus pandemic.

Ordinances typically go into effect 30 days after passage, so People First Portland and others, including the chamber, have said the $18-per-hour wage will take effect in early December.

But the city council last week said a plain reading of the ordinance indicates it should take effect in January 2022, and it instructed staff not to enforce the measure until that time.

The conflicting legal interpretations leaves employers in a tough spot, Erwin said. If they follow the city’s interpretation and refuse to pay the emergency wage until 2022, they could be sued by workers and forced to pay damages that are three times the back wages owed, he said.

If they decide to pay the emergency wage and a court later rules it should not have gone into effect until later, they will have a hard time recouping extra wages they already paid out. That’s in addition to the serious disruptions many businesses have predicted from having to pay the emergency wage.

The issue of when the ordinance takes effect will likely remain unresolved until a court makes a ruling on it, Erwin said.

“Until a court rules and ultimately until the Maine Supreme (Judicial) Court rules, we don’t have a definitive understanding of when the rule goes into effect,” he said.

Employers banding together as a community to refuse to pay the emergency wage until 2022 is also legally dangerous because of anti-monopoly laws, Erwin said.

“I want employers to be wary of speaking to one another about paying less,” he said. “There are antitrust implications.”

Chamber CEO Quicy Hentzel said her organization is not aware of any concerted effort that would trigger antitrust concerns, and that she was not aware of any group filing a lawsuit to get Maine’s highest court to weigh in on the ordinance.

Employers large and small have warned that the emergency wage will have serious consequences for their businesses, which they said are already struggling during the pandemic. In dozens of emails to city councilors, employers said they would be forced to cut back hours and benefits, lay off workers, restrict hours, leave Portland or close entirely.

Nevertheless, some have decided not to take the risk, opting to follow the more liberal interpretation of the ordinance and start paying the emergency wage next month.

John Naylor, owner of Rosemont Market, which has three locations in Portland, said he intends to pay the emergency wage while he gets more clarity about the new rule.

“The city council, I don’t know how they can change it,” he said. “That is really it for us.”

Naylor added that he supports a living wage in Portland and has been paying most workers nearly $15 an hour already.

Steve Dimillo, owner of DiMillo’s on the Water, said his restaurant was still uncertain but leaning toward paying the wage.

“We have a certain hesitation going with what the city decided they were going to do,” DiMillo said.

His company is still consulting with attorneys for guidance.

“What I don’t want to find out is that we go along with what the city has determined, and three months down the road I owe all that back pay and someone has taken legal action on me,” he said.

Other employers did not respond to interview requests or declined because they were still seeking legal guidance.

Some workers who have been exposing themselves to potential risk on the job ever since the state reopened most businesses, following forced closures in the spring, said they look forward to the wage boost.

Sarah Williams, 26, a restaurant cook in Portland, said she fully expected the emergency wage would take effect this year, even though it means her employer will likely have to lay off some of her coworkers.

Williams said she has worked for two restaurants since such businesses were able to reopen this spring, and that she took a pay cut each time. Taking lower and lower pay is tough to stomach as the worsening pandemic increases the risk of coming to work, she said.

“If the state or the cities aren’t willing to shut everything back down and they make us come back to work with no rent freezes or another round of stimulus checks, they should be compensating us for ruining our lives and our community’s lives,” she said.

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