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HomeMy WebLinkAboutCORRESPONDENCE - Item #22 January 26, 2021 Re: Hazard Pay Ordinance Dear Members of the Santa Ana City Council: On behalf of the California Retailers Association (CRA), inclusive of our grocery and retail pharmacy members, we respectfully urge the Council to refrain from passing a mandated a wage increase, especially in the absence of a complete economic impact analysis on the effects such a mandate would have on essential businesses, and subsequently, our local communities. The California Retailers Association is the only statewide trade association representing all segments of the retail industry including general merchandise, department stores, mass merchandisers, fast food restaurants, convenience stores, supermarkets and grocery stores, chain drug, and specialty retail such as auto, vision, jewelry, hardware and home stores. CRA works on which currently operates over 164,200 stores and employs around 2,776,000 peoplenearly one fifth of A mandated pay increase beyond what retail employers can tolerate without raising prices or cutting workforce hours will hurt both consumers and our hardworking employees. This is the last thing our members want to do in the middle of the COVID-19 pandemic and economic crisis. A number of our members are already offering substantial increases in hourly pay and employee bonuses in recognition of the essential work these employees are providing. An inflexible, one-size-fits-all approach risks increasing the cost of food, grocery, and retail pharmacy drugs and will disproportionately impact those in our communities who are already bearing the brunt of this pandemic. All of this comes on top of the recent minimum wage increase. This is why we would request an economic study before the Council mandates a substantial pay increase. We request that this motion be amended to include an economic study prior to any consideration of an increase in pay. Sincerely, Steve McCarthy Vice President, Public Policy California Retailers Association 1121 L Street, Suite 607 Sacramento, CA 95814 P: 916/443-1975 www.calretailers.com February 1, 2021 Dear Local Elected Leaders: Our coalition of local grocers, community advocates, and business lead ers strongly urge our local elected leaders to undertake a complete economic impact assessment to fully understand the consequences of any proposed mandatory grocery worker wage-increase ordinances before moving forward. Local grocery stores are committed to paying competitive wages and benefits to their employees. Since the start of the COVID-19 pandemic, grocers have invested significantly in infrastructure and enhanced safety protocols to protect frontline essential workers and shoppers, as well as to provide incentive pay, bonuses and additional health benefits for grocery workers. The proposed emergency pay mandates ignore this commitment and ongoing efforts, and would have significant, negative impacts at the worst possible time. The proposed increases in grocery worker pay would substantially increase the cost of food and groceries for residents and families by an estimated $400 per year for a family of four. Higher grocery costs would hurt Californians at a time they are already struggling to put food on the table and would be especially harmful to low-income, people of color and disadvantaged communities. According to a recent Public Policy Institute of California survey, 40% of Los Angeles County residents earning less than $40,000 per year have had trouble paying some kind of bill as a result of COVID-19. Thirty-nine percent (39%) of these Los Angeles County low-income residents report cutting back on food. Increasing the cost of groceries and other essentials would only compound these already-concerning statistics. Extra pay mandates could also harm the very workers they are intended to help. Higher costs could force grocers to reduce the number of workers, available hours, and even store locations. In addition, extra pay mandates could make it more difficult for many grocers to stay afloat, especially independent grocers, small markets, ethnic grocers and grocery stores in disadvantaged communities already struggling to keep their doors open. Most grocers operate with thin margins, even during the pandemic. Shutting down grocery stores will result in increased food insecurity and food deserts, especially in low-income and disadvantaged neighborhoods. These ordinances are rushed and not adequately researched. We urge our local elected leaders to pause the vote on any local extra pay ordinance until you complete a full analysis of the costs, impacts on local families and our community, and input from local businesses. Additional, extra pay mandates will not make grocery workers any safer. Sincerely, Ron Fong, President & CEO Rachel Michelin, President & CEO California Grocers Association California Retailers Association Robert Rivinius, President Robert C. Lapsley, President Family Business Association of California California Business Roundtable Elizabeth Graham, Executive Director Pat Fong Kushida, President & CEO California Fuels & Convenience Alliance CalAsian Chamber of Commerce Jay King, President Julian Canete, President & CEO California Black Chamber of Commerce California Hispanic Chambers of Commerce Jeremy Harris, President & CEO Ruben Guerra, Chairman & CEO Long Beach Area Chamber of Commerce The Latin Business Association Maria S. Salinas, President & CEO Lucy Dunn, President & CEO Los Angeles Area Chamber of Commerce Orange County Business Council Stuart Waldman, President Cindy Roth, President & CEO Valley Industry & Commerce Association Greater Riverside Chambers of Commerce Tracy Hernandez, Founding CEO Genevieve Morrill, President & CEO Los Angeles County Business Federation West Hollywood Chamber of Commerce (LA BizFed) Donna Duperron, President & CEO Faith Bautista, Chief Executive Officer Torrance Area Chamber of Commerce National Diversity Coalition Faith Bautista, President & CEO Doug Kessler, Executive Director National Asian American Coalition Si Se Puede Foundation of Fresno, Kern, Theresa Harvey, President & CEO Kings and Tulare Counties North Orange County Chamber of Commerce Bill Manis, President & CEO Lily Rocha, Board Chair San Gabriel Valley Economic Partnership Latino Restaurant Association Adam Ruiz, Chair Southwest California Legislative Council 2 Park Plaza, Suite 100 | Irvine, CA 92614| P 949.476.2242 | F 949.476.0443 | www.ocbc.org February 1, 2021 The Honorable Vicente Sarmiento Mayor City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 RE: Santa Ana Hazard Pay Proposal OPPOSE Dear Mayor Sarmiento and Members of the City Council: Orange County Business Council (OCBC), the leading voice of business in Orange County, is a strong advocate for balancing support for workers with relief for businesses also reeling from the pandemic. A hazard pay ordinance could inflict financial harm on employers at the worst possible time, while also unintentionally damaging workers and consumers. Therefore, OCBC opposes a locate mandate requiring hazard pay for any workers and asks the City Council to conduct a complete economic impact assessment to fully examine the consequences of a hazard pay ordinance before progressing forward. Local grocery stores, pharmacies, retailers and other essential employers are committed to paying competitive wages and benefits to their employees. Since the start of the COVID-19 pandemic, they have invested significantly in infrastructure and enhanced safety protocols to protect frontline essential workers and shoppers. They have also provided incentive pay, bonuses and additional health benefits. According to an economic study released by the California Grocers Association, up to an additional $5/hour increase in pay could raise grocery prices by about $400 annually for the typical family of four at the worst possible time. A hazard pay ordinance could also harm workers, rather than help them. The economic study concluded that, if grocers must offset savings in operational costs, they would need to reduce work hours by 24 percent across the board. Higher costs could even force employers to shutter store locations. Shutting down grocery stores will result in increased food insecurity and food deserts, especially in low-income and disadvantaged neighborhoods. A hazard pay ordinance for any industry consider research and cannot be duplicative or rushed. For these reasons, OCBC opposes a hazard pay ordinance and strongly urges the Council to perform a complete analysis of the costs of such an ordinance. Sincerely, Jennifer Ward Senior Vice President of Advocacy and Government Affairs THE LEADING VOICE OF BUSINESS IN ORANGE COUNTY Dpotvnfs!boe!Dpnnvojuz!Jnqbdut!pg!Ib{bse!Qbz!Nboebuft! jj! Dpotvnfs!boe!Dpnnvojuz!Jnqbdut!pg!Ib{bse!Qbz!Nboebuft! jjj! Dpotvnfs!boe!Dpnnvojuz!Jnqbdut!pg!Ib{bse!Qbz!Nboebuft! 5! Dpotvnfs!boe!Dpnnvojuz!Jnqbdut!pg!Ib{bse!Qbz!Nboebuft! 6! Dpotvnfs!boe!Dpnnvojuz!Jnqbdut!pg!Ib{bse!Qbz!Nboebuft! 7! Dpotvnfs!boe!Dpnnvojuz!Jnqbdut!pg!Ib{bse!Qbz!Nboebuft! 8! Dpotvnfs!boe!Dpnnvojuz!Jnqbdut!pg!Ib{bse!Qbz!Nboebuft! 9! Dpotvnfs!boe!Dpnnvojuz!Jnqbdut!pg!Ib{bse!Qbz!Nboebuft! :! Dpotvnfs!boe!Dpnnvojuz!Jnqbdut!pg!Ib{bse!Qbz!Nboebuft! T 21 Dpotvnfs!boe!Dpnnvojuz!Jnqbdut!pg!Ib{bse!Qbz!Nboebuft! 22 McCRACKEN, STEMERMAN & HOLSBERRY, LLP Counselors and Attorneys at Law San Francisco February 2, 2021 595MarketStreet,Suite800 SanFrancisco,CA94105 Re: Grocery Worker Hazard Pay Ordinances 415.597.7200 To Whom It May Concern, Fax415.597.7201 Our law firm represents UFCW Local 324. Local 324 has asked us to StevenL.Stemerman(CA,NV) present our legal opinion on hazard pay ordinances that require large grocery RichardG.McCracken(CA,NV) stores to pay front-line workers a wage premium to reflect the hazardous W.DavidHolsberry(CA,NV) conditions in which they work during the COVID-19 pandemic. Local 324 has JohnJ.Davis(CA) asked us for our opinion because we have litigated many of the major cases on KristinL.Martin(CA,NV,HI) the constitutionality of municipal wage protections, including Livadas v. EricB.Myers(CA,NV) Bradshaw, 512 U.S. 107 (1994); American Hotel & Lodging Association v. City PaulL.More(CA,NV,MA) of Los Angeles, 834 F.3d 958 (9th Cir. 2016); RUI One Corp. v. City of SarahVarela(CA,AZ,NV) Berkeley, 371 F.3d 1137 (9th Cir. 2004); Fortuna Enterprises, L.P. v. City of SarahGrossmanSwenson(CA,NV) Los Angeles, 673 F. Supp. 2d 1000 (C.D. Cal. 2008); and Garcia v. Four Points KimberlyHancock(CA) Sheraton LAX, 188 Cal. App. 4th 364 (2010). KimberleyC.Weber(CA,NV) A.MirellaNieto(CA) Grocery worker hazard pay ordinances are fully consistent with the RichardTreadwell(CA) municipal living-wage and other premium-pay ordinances that federal and KaraMaddalena(CA) LukeDowling(CA) California courts have consistently upheld. They pose no constitutional IvyYan(CA) problems whatsoever. Hazard pay ordinances require that large grocery stores, superstores, and pharmacies pay their frontline workers an additional hourly wage premium—on RobertP.Cowell(19311980) top of their base wages and benefits—to compensate workers for the hazards that they face during the COVID-19 pandemic. Many grocery store chains and pharmacies introduced hazard, or “hero,” pay at the beginning of the pandemic, PhilipPaulBowe(CA)(Ret.) but phased out this premium pay in the Spring or Summer of 2020. So while BarryS.Jellison(CA)(Ret.) major grocery and pharmacy companies like Kroger, Albertsons, and Walgreens have enjoyed substantial increases in revenues and profits during the pandemic, front-like workers who face the most significant risk from COVID-19 have not 1 shared in this bounty. Long Beach, Seattle, and Santa Monica have already Las Vegas passed hazard-pay ordinances, and San Jose, Berkeley, Santa Ana, Los 1630CommerceStreet,SuiteA1 LasVegas,NV89102 1 See Molly Kinder, Laura Stateler and Julia Du, “Windfall profits and deadly 702.386.5107 risks: How the biggest retail companies are compensating essential workers Fax702.386.9848 during the COVID-19 pandemic” B ROOKINGS I NSTITUTE (November 2020), at https://www.brookings.edu/essay/windfall-profits-and-deadly-risks/. McCRACKEN, STEMERMAN & HOLSBERRY, LLP Grocery Worker Hazard Pay Ordinances February 2, 2021 Page 2 of 5 Angeles, West Hollywood, Santa Clara, and San Mateo are considering them as well. Shortly after the City of Long Beach passed its ordinance, the California Grocers Association (“CGA”) filed a lawsuit in federal court, claiming that the ordinance is unconstitutional. The federal judge assigned to the case has already denied CGA’s request to enjoin the ordinance from going into effect. We are certain that the judge will dismiss the lawsuit at the earliest opportunity. CGA raises three legal theories in its lawsuit, all of which have been decisively rejected by the Supreme Court and by lower federal and state courts. Equal Protection First, CGA claims that by targeting large grocery stores, the Long Beach ordinance violates the constitutional Equal Protection Clause. But legislative classifications in economic regulation like Long Beach’s ordinance are subject to highly deferential rational-basis review under the Equal Protection Clause.Williamson v. Lee Optical of Oklahoma, Inc., 348 U.S. 483, 488–489 (1955); Hodel v. Indiana, 452 U.S. 314, 331–332 (1981); Levin v. Commerce Energy, Inc., 560 U.S. 413, 426 (2010). Rational basis review is met if a court determines that there is “any reasonably conceivable state of facts that could provide a rational basis for the classification.” FCC v. Beach Commc’ns, Inc., 508 U.S. 307, 313 (1993). The Long Beach ordinance’s application to large grocery stores easily passes rational basis scrutiny. It targets businesses that employ workers deemed essential by California who face particular risks of COVID-19 infection, but excludes smaller businesses that may be less able to afford the mandated pay. Classifications targeting particular businesses like those in the Long Beach ordinance are perfectly constitutional. See, e.g., International Franchise Ass’n, Inc. v. City of Seattle, 803 F.3d 389, 407 (9th Cir. 2015) (upholding higher municipal minimum-wage ordinance that applied to national franchises: “The district court properly cited the rational-basis standard. . . . It is legitimate and rational for the City to set a minimum wage based on economic factors, such as the ability of employers to pay those wages.”); RUI One Corp. v. City of Berkeley, 371 F.3d 1137, 1154 (9th Cir. 2004) (upholding over equal-protection challenge a municipal living-wage ordinance that applied only to a small number of businesses located in the Berkeley Marina); California Grocers Assn. v. City of Los Angeles, 52 Cal.4th 177, 211 (2011) (upholding municipal job retention requirement targeting large grocery stores in Los Angeles); Associated Builders and Contractors of California Cooperation Committee, Inc. v. Becerra, 231 F.Supp.3d 810, 827 (S.D. Cal. 2017) (applying rational basis review to prevailing wage law modification); Fortuna Enterprises, L.P. v. City of Los Angeles, 673 F. Supp. 2d 1000, 1013 (C.D. Cal. 2008) (upholding municipal minimum-wage law that applied only to hotels with more than 50 rooms located near Los Angeles International Airport). In its lawsuit, CGA has argued that the Long Beach ordinances violates its “fundamental right” to contract with its employees on whatever basis it wants, including the wages that it will pay them. It claims that the ordinance should therefore be reviewed under the “strict scrutiny” test, which applies to the denial of fundamental rights like the right to speak, the right to be free McCRACKEN, STEMERMAN & HOLSBERRY, LLP Grocery Worker Hazard Pay Ordinances February 2, 2021 Page 3 of 5 of discrimination, and the right to vote. Of course, if this legal argument were correct, then the government could never mandate minimum wages, overtime, rest breaks, or safety protections that “interfered” with a private employer’s contract with its employees to provide something inferior. That has not been the law for nearly 100 years, since the United States Supreme Court upheld New Deal economic legislation and brought an end to the so-called Lochner era of jurisprudence.West Coast Hotel Co. v. Parrish, 300 U.S. 379, 392-93 (1937) (upholding Washington State minimum-wage law over equal protection challenged based on alleged “fundamental right” to freedom of contract). CGA’s attempt to revive a legal theory that has been dead since the 1930s and contradicts decades of intervening Supreme Court and federal court precedent is bizarre and will not succeed. Contracts Clause CGA also argues that laws mandating that it pay an additional premium wage to grocery workers violates the Contracts Clause in the U.S. Constitution. The Contracts Clause provides that “\[n\]o state shall ... pass any ... Law impairing the Obligation of Contracts,” U.S. Const. art. I, § 10, cl. 1, thereby “restrict\[ing\] the power of States to disrupt contractual arrangements.” Sveen v. Melin, 138 S.Ct. 1815, 1821 (2018). But while this text is “facially absolute,” the Supreme Court has long held that “its prohibition must be accommodated to the inherent police power of the State ‘to safeguard the vital interests of its people.’ ” Energy Reserves Group, Inc. v. Kan. Power & Light Co., 459 U.S. 400, 410 (1983) (quoting Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398, 434 (1934)). Whether a regulation violates the Contract Clause is governed by a three-step inquiry: “The threshold inquiry is ‘whether the state law has, in fact, operated as a substantial impairment of a contractual relationship.’ ” Energy Reserves, 459 U.S. at 411 (quoting Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 244 (1978)). If this threshold inquiry is met, the court must inquire whether “the State, in justification, \[has\] a significant and legitimate public purpose behind the regulation, such as the remedying of a broad and general social or economic problem.” Energy Reserves, 459 U.S. at 411–12 (citation omitted). Finally, the court must inquire “whether the adjustment of ‘the rights and responsibilities of contracting parties is based upon reasonable conditions and is of a character appropriate to the public purpose justifying the legislation’s adoption.’ ” Id. at 412–13 (quoting United States Trust Co. v. New Jersey, 431 U.S. 1, 22 (1977)). The premium-pay mandated by the Long Beach ordinance does not “substantially impair” any retailer’s employment contracts under the Contracts Clause. Even if the Ordinance impaired grocery stores’ contractual ability to deny their workers hazard pay, any impairment would not be “substantial” in light of the extensive regulation of employee wages that already exist.Energy Reserves, 459 U.S. at 411 (“In determining the extent of the impairment, we are to consider whether the industry the complaining party has entered has been regulated in the past.”). For this reason, courts regularly reject Contracts Clause challenges to economic regulation of the employment relationship. See RUI One, 371 F.3d at 1150 (upholding municipal living-wage ordinance over Contracts Clause challenge); Olson v. California, No. CV1910956DMGRAOX, McCRACKEN, STEMERMAN & HOLSBERRY, LLP Grocery Worker Hazard Pay Ordinances February 2, 2021 Page 4 of 5 2020 WL 6439166, at *11 (C.D. Cal. Sept. 18, 2020) (rejecting contracts-clause challenge to AB5’s classification of rideshare drivers as employees “\[b\]ecause ‘“\[s\]tates possess broad authority under their police powers to regulate the employment relationship to protect workers within the State\[.\]”’”) (internal citation omitted). Businesses in California are already heavily regulated in the wages that they may pay, through state and local minimum-wage laws, overtime laws, paid meal period requirements, and sick pay requirements to name a few. No modern court has held that an employer may avoid a statutory minimum- or premium-pay regulation by pointing to its private employment contracts. Moreover, even if CGA could show that the hazard-pay ordinance “substantially impaired” its employment contracts to pay something less, “\[u\]nless the State itself is a contracting party, ‘as is customary in reviewing economic and social regulation, . . . courts properly defer to legislative judgment as to the necessity and reasonableness of a particular measure.’ ” Energy Reserves, 459 U.S. at 412–13 (quoting United States Trust Co., 431 U.S. at 22–23);Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 506 (1987); RUI One Corp., 371 F.3d at 1150 (upholding a municipal living wage ordinance that altered contractual expectations because “\[t\]he power to regulate wages and employment conditions lies clearly within a state’s or a municipality’s police power.”); Lyon v. Agusta S.P.A., 252 F.3d 1078, 1086 (9th Cir. 2001) (“\[T\]he Supreme Court has not blanched when settled economic expectations were upset, as long as the legislature was pursuing a rational policy.”). As with CGA’s equal protection challenge, Long Beach’s hazard-pay requirement meets the rational-basis test that applies to economic regulation affecting purely private contracts. Federal Labor Preemption Finally, CGA argues in its lawsuit that the Long Beach ordinance is preempted by the National Labor Relations Act because it allegedly conflicts with unionized grocery stores’ collective bargaining with unions over pay. This argument misunderstands the relationship between federal labor law and substantive employment rights like those bestowed by hazard-pay ordinances. Under the Machinists doctrine of NLRA preemption, “\[s\]tates are . . . prohibited from imposing additional restrictions on economic weapons of self-help, such as strikes and lockouts, unless such restrictions presumably were contemplated by Congress.”Golden State Transit Corp. v. City of Los Angeles, 475 U.S. 608, 614-615 (1986) (emphasis added, citations omitted). The Supreme Court has repeatedly rejected the notion that state substantive employment standards—like minimum wages, overtime, severance pay, and other wage premiums—violate this doctrine because they give unionized workers something that they might otherwise have to bargain for. The NLRA regulates the processof collectivebargaining, not the substantive outcomes of that bargaining. Both employers and unions come to the bargaining table against a backdrop of state employment regulation, both favorable to employers (the at-will employment presumption) and to workers (minimum-wage laws). Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 753-758 (1985) (“Minimum state labor standards affect union and McCRACKEN, STEMERMAN & HOLSBERRY, LLP Grocery Worker Hazard Pay Ordinances February 2, 2021 Page 5 of 5 nonunion employees equally, and neither encourage nor discourage the collective-bargaining processes that are the subject of the NLRA. . . . Rather, they are minimum standards ‘independent of the collective-bargaining process \[that\] devolve on \[employees\] as individual workers, not as members of a collective organization.’”); Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 21 (1987) (fact “that a state statute pertains to matters over which the parties are free to bargain cannot support a claim of pre-emption”). State and local substantive employment standards do not interfere with collective bargaining and are not preempted. Based on this Supreme Court precedent, federal courts have repeatedly rejected claims that the NLRA preempts minimum-wage laws and other employment standards. American Hotel & Lodging Association v. City of Los Angeles, 834 F.3d 958, 965 (9th Cir. 2016) (“It is no surprise, then, that ‘state minimum benefit protections have repeatedly survived Machinists preemption challenges,’ because they do not alter the process of collective bargaining”); Associated Builders & Contractors of So. Calif. v. Nunn, 356 F.3d 979, 990 (9th Cir. 2004) (minimum wages and benefits for state-registered apprentices on public and private construction projects not preempted; “‘state minimum benefit protections have repeatedly survived Machinists preemption challenges’”); National Broadcasting Co., Inc. v. Bradshaw, 70 F.3d 69, 71 (9th Cir. 1995) (state overtime protection that applied in broadcast industry not preempted underMachinists);Viceroy Gold Corp. v. Aubry, 75 F.3d 482, 489 (9th Cir. 1996) (overtime regulation that applied only to miners was not preempted); Fortuna Enters., 673 F.Supp.2d at 1006-12 (living-wage law not preempted under Machinists). CGA’s constitutional claims against the Long Beach ordinance are baseless and will soon be dismissed. The fact that this employer association filed a meritless lawsuit should not be a reason to delay providing grocery workers fair compensation for the risks they are taking on our behalf. Sincerely, Paul L. More DBMJGPSOJB!HSPDFST!BTTPDJBUJPO!!}!!2116!23ui!Tusffu-!Tvjuf!311-!Tbdsbnfoup-!DB!:6925 Q;!):27*!559.4656!!}!!G;!):27*!559.38:4!!}!!xxx/dbhspdfst/dpn DBMJGPSOJB!HSPDFST!BTTPDJBUJPO!!}!!2116!23ui!Tusffu-!Tvjuf!311-!Tbdsbnfoup-!DB!:6925 Q;!):27*!559.4656!!}!!G;!):27*!559.38:4!!}!!xxx/dbhspdfst/dpn February 1. 2021 The Honorable Vicente Sarmiento Mayor City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Dear Mayor Sarmiento: As the leading national organization representing the interests of Latino-owned grocery and food industry businesses both large and small, the Latino Food Industry Association (LFIA) is seriously concerned over the move to impose an additional $5/hour increase in grocery worker pay because it only targets one industry engaged in public retail interactions, imposes additional costs to smaller Latino owned grocery stores already spending exorbitant dollars to keep employees and customers safe and would significantly increase the cost of food and groceries for local families and communities, especially for low-income, people of color and disadvantaged communities. We also believe more time is needed to assess the consequences of extra pay-increase motions before causing unintended consequences for our member grocers, their employees, and the community that relies on them to feed their families. Most of our members impacted by the ordinance are already operating on razor thin margins and have already spent considerable resources to keep their employees and customers safe during the current pandemic. Our members recognize the sacrifice of their employees that work on the frontlines providing customers safe access to food and other products during this incredibly difficult time and gone to extraordinary steps to protect them by spending millions of dollars to purchase of personal protection equipment (PPE), plexiglass barriers, changing the store filtration systems, extensive cleaning and disinfection and other safeguards, enhanced safety protocols, extra pay and bonuses, and additional health benefits for grocery workers. Additionally, a number of our member stores created special hours of operation to allow seniors to shop safely. Our members have also complied with local safety ordinances and recommendations from the CDC which are necessary to keep employees and customers safe but have driven costs to our members including driving up grocery costs for families, putting more financial strain on struggling stores and their employees at the worst time. Higher costs could also force our members to reduce the number of workers, available hours, and store locations. Many LFIA members may find it too difficult to remain open, especially independent grocers located in disadvantaged communities because most operate on razor thin margins, even during the pandemic. If grocery stores start to shut down, it will only increase food insecurity, especially in low- income and disadvantaged neighborhoods. Latino Food Industry Association 1 MacArthur Place, Santa Ana, CA 92707 LFIA believes our members can protect and support essential grocery workers without increasing costs during a pandemic-induced economic recession. We also believe more time is needed to assess the negative consequences of extra pay-increase motions before causing unintended consequences for our grocer members, their employees, and the community that relies on them to feed their families. We urge you to hold listening sessions with the business community and other stakeholders to allow an opportunity to discuss the impacts of the Hero Pay and possible solutions we can support as partners in addressing the impacts of the pandemic. For the reasons state above, LFIA is urging an analysis of the costs, assess unintended consequences and impacts on families and communities, and obtain input from grocers and businesses before voting on the language. Sincerely, LFIA Board CC: Mayor Pro Tem David Penaloza Councilmember Thai Viet Phan Councilmember Jessie Lopez Councilmember Phil Bacerra Councilmember Johnathan Ryan Hernandez Councilwoman Nelida Mendoza Latino Food Industry Association 1 MacArthur Place, Santa Ana, CA 92707