Attorney: Portland risks lawsuits over delay of emergency minimum wage hike

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Advocates behind the slate of ballot questions Portland voters approved Nov. 3 hope to find a way around the City Council’s decision to delay implementation of an $18-an-hour emergency minimum wage. 

The council reached its decision after an executive session last week with the city corporation counsel, as part of an overall conversation on the legal parameters of implementing the five referendum questions that passed overwhelmingly on Election Day.

Councilors hope to delay the higher minimum wage increase until 2022 based on their interpretation of what they called the question’s “plain language.”

Portland City Hall. (Portland Phoenix/Colin Ellis)

In response, People First Portland, the progressive political group behind five of the citizen initiative referendum questions that appeared on the ballot, said the language in the question was clear and the $18-per-hour emergency rate should take effect Dec. 3.

In a press release, People First Portland said councilors are “turning their back on our essential workers” during a time when COVID-19 cases are on the rise across the state. The group also said the council is putting businesses at risk of owing significant back pay if they follow the city’s guidance.

“The council has opposed this ordinance from the beginning, but they should not let their own biases cause them to disregard the legal language of the ordinance or the strong majority of our city,” the statement said. “Furthermore, the council and opposing groups made the immediacy of the hazard pay measure the crux of their opposition to Question A. The council is now disregarding their previous statements and the summary text on the ballot they wrote and approved.”

Ben Gaines, an attorney for People First Portland, said the decision could invite lawsuits.

“I think that the elected officials of Portland had a choice how they were going to approach this ordinance, and they deliberately chose to ignore the intent of the voters of Portland,” he said.

“I think this is going to be resolved via small lawsuits of individual workers trying to vindicate their rights,” Gaines continued. “I hope that means an employer like Whole Foods and Amazon are getting sued, and not small businesses in Portland.”

Leo Hilton, another representative of People First Portland, said the group was “obviously disappointed” by the City Council making what he called “such a confusing decision for workers and employers alike.”

“We’re actively reaching out to workers asking for information on if their employers intend to cooperate with the $18 minimum wage as it’s clearly laid out,” Hilton said. “We’re hoping that will provide a legal outlet for workers who are going to be denied that pay as the law requires.”

Hilton said the hope is that businesses will comply with the law on their own, regardless of the actions of the City Council.

“We’re also really looking forward to working with employers to advocate for the money they need to not only pay their workers but to keep their doors open,” he said, adding that employees at essential businesses are often being asked to work in dangerous conditions. “We’re looking to the City Council to step up and appropriate the funds they have.”

The minimum wage initiative, Question A, raises the hourly wage floor in the city to at least $15 over three years and increases the minimum for tipped workers. During a state of emergency such as the ongoing coronavirus pandemic, however, the ordinance requires businesses to pay employees 1.5 times the minimum wage – bringing the rate up to $18 an hour, based on the state’s current minimum wage of $12 per hour.

The city’s interpretation is that the hazard pay section wouldn’t go into effect until 2022, because there is no minimum wage clearly defined in the city’s existing ordinances. The city says the minimum wage will be raised to $13 per hour in January 2022, at which point the hazard pay provision can be applied.

While it is not clear exactly how many workers the emergency provision could impact this winter, these initiatives are predominantly aimed at workers in the service industry.  

The Portland Regional Chamber of Commerce also opposed several of the ballot questions and issued a statement following their passage on Nov. 3. Quincy Hentzel, the chamber’s president and CEO, said the group was disappointed by the passage of Questions A, C, and E, which it believes will have significant impact on local businesses.

Hentzel said the wage hike and emergency increase would leave Portland with the highest minimum in the country at $18 an hour, and an overtime rate of $27 per hour. When the minimum wage increases to $15 per hour in three years, the emergency minimum would be $22.50 per hour, with overtime at $33.75 per hour.

“These wages are not sustainable for businesses who have been hit hard by the pandemic and remain uncertain about their future,” Hentzel said. “The only way to alter the ordinance in the next five years is by yet another expensive and divisive referendum process. Even worse, if businesses or nonprofits begin to cut back on workers’ hours or lay them off, move out of the city, or shut their doors entirely, there is no quick solution other than a lengthy referendum process.”

In addition to interpreting the minimum wage question as not having to take effect until January 2022, the council also said the city, for now, would continue awarding marijuana business licenses under its existing ordinance.

Immediately following the Nov. 10 workshop on the first two ordinances, Mayor Kate Snyder said the city will take on the referendums “incrementally,” since they all need to be discussed with legal counsel.