At their final meeting of the year, on December 20, 2021, city councilors in Portland, Maine left the city’s existing COVID-19 emergency order in place, thereby triggering implementation of a significant hazard pay requirement. As a result, covered employers in Portland must pay hourly employees at least $19.50 per hour starting January 1, 2022.

Background

In the November 3, 2020 election, voters approved a referendum amending the city’s minimum wage ordinance by incrementally increasing the regular minimum wage $1.00 per hour annually until reaching $15.00 per hour in 2024. Thereafter, the city’s minimum wage will increase by a cost-of-living metric.

The amended ordinance also included a provision requiring hazard pay of 1.5 times the regular minimum wage for “work performed during a declared emergency.” Because such an emergency related to the pandemic is currently in effect, the $13.00 per hour minimum wage taking effect on January 1, 2022 will result in a $19.50 per hour hazard wage rate for 2022. If Portland is under an emergency order on January 1, 2023, the hazard rate would jump to $21.00 per hour.

Following the 2020 election, a dispute arose as to the constitutionality of the minimum wage referendum as well as the start date of the hazard pay provision, with one side arguing for a December 2020 start and the other arguing for a January 2022 start. As discussed in a prior article, on July 6, 2021, the Maine Supreme Judicial Court unanimously held that the voter-initiated legislation establishing an emergency minimum wage was constitutional but would not take effect until January 1, 2022.

The Hazard Pay Provisions

Nearly seven months later, with the COVID-19 pandemic still surging, the city council delayed until after January 1, 2022 any action to forestall such implementation. Thus, the hazard pay provision is now set to take effect, with far-reaching impact. The minimum wage ordinance includes broad definitions of employers and employees, making the new $19.50 minimum wage applicable to virtually anyone who earns wages in Portland, Maine, including full-time, part-time, seasonal, and temporary workers.

The ordinance defines “Employer” as “[a]ny individual, group of individuals, partnership, association, corporation, business trust, or any other entity or group of persons or entities who employs or exercises control over the wages, hours, or working conditions of any Employee and who has a place of business within the City limits.” Similarly, “Employee” means “[a]ny person who performs work for an Employer for monetary compensation within the municipal limits of the City.”

Thus, nearly every employee performing work in Portland will be eligible for a “hazard minimum wage” of $19.50 per hour in 2022. The hazard pay provision does not apply, however, “to work performed under a teleworking arrangement, as defined under 5 U.S.C. § 6501, allowing the Employee to work from home.” There are no other exemptions in the ordinance, so a covered employer seeking to avoid a hazard pay obligation for particular employees would presumably have to convert them to telework. 

What’s Next?

When Portland’s city council meets again on January 3, 2022, it is expected to vote on whether to repeal or further extend the COVID-19 emergency order. The city council could delay action again, leaving in place the existing emergency order and the hazard pay provision.

At its December 20 meeting, the city council also signaled support for a broad mask mandate, which will also come up for a vote in the new year.

For now, employers should start preparing to adjust wages to comply with Portland’s minimum wage ordinance and its hazard pay provision effective January 1, 2022. Failure to comply can result in the City Manager ordering the payment of back wages plus a minimum fine of $100 per day an employer is out compliance. Violations of the city ordinance could also trigger civil liability under Maine’s state wage provisions, which permits recovery of treble damages and attorneys’ fees.

Employers subject to Portland’s minimum wage ordinance may want to consult with counsel to ensure compliance with federal, state, and local laws. Relatedly, employers with employees who are exempt from the minimum wage also should be aware that the minimum salary threshold for exemption is increasing to $735.59 per week in Maine in 2022.