A version of this story first appeared on Berkeleyside’s sister site, The Oaklandside.
In March 2020, Trader Joe’s, a major grocery chain with locations in 43 states, announced that it was giving its employees an additional $2 per hour in “thank you” pay for working during the COVID-19 pandemic. Then earlier this year, the company upped this pay to $4 for all of its locations. The move came as some cities were passing “hazard” pay ordinances for grocery workers, in recognition of the dangers they’ve faced.
But in an April 12 email sent to all of its employees, including its two Oakland locations, Trader Joe’s executives wrote that “Given the availability of COVID-19 vaccines, we will be returning our ‘thank you’ pay to $2 an hour for all hourly crew members.” The memo was sent by company’s CEO Dan Bane, President Jon Basalone, and Executive Vice President of Finance and Administration Bryan Palbaum. Trader Joe’s employees shared a copy of the letter with The Oaklandside.
Some employees at the grocer’s Lakeshore Avenue location are upset about the announcement and feel that they should still be receiving extra pay because of the hazard they face showing up to work. Alameda County is still in the orange tier, meaning that there is a moderate risk of contracting COVID-19, according to state health officials. They’re also upset because the company’s decision effectively means they’ll be making $3 less per hour than their colleagues who work at the company’s Rockridge location, and soon they’ll be making $5 less per hour, even though their jobs are virtually the same.
That’s because when the Oakland City Council passed its local hazard pay requirement for grocery stores this past February, the city’s extra $5 per hour didn’t cover the Trader Joe’s location on Lakeshore Avenue. The store isn’t classified as a large grocer under the ordinance. Although Trader Joe’s has more than 500 employees nationwide, the city’s ordinance also requires that each individual store location be a minimum of 15,000 square feet. The Trader Joe’s on Lakeshore Avenue is 14,560 square feet, according to Oakland’s Planning and Building Department.
Trader Joe’s Rockridge store is 18,850 square feet in size, which meant that its employees started receiving the city’s additional $5 per hour in hazard pay for the past several months, earning $1 per hour more than Lakeshore Avenue workers. The Rockridge employees will continue receiving this pay until the city and county declare the COVID-19 emergency over.
“As somebody who is less than five miles away from people with exactly the same job, at exactly the same company, but my store is smaller than theirs, it’s frustrating they’ll be making more than me per hour,” said a Lakeshore Trader Joe’s employee who asked not to be named for fear of retaliation by store management.
Another crew member who requested to not be named said the additional hazard pay made a significant difference between living comfortably and living under constant financial stress. “If I don’t hustle every single day, I could easily have everything taken away from me,” the employee said.
The Oaklandside contacted Trader Joe’s corporate office to ask about the decision to reduce pay for its employees, but the company did not respond. We also called the Lakeshore Avenue store but a manager referred us to the corporate office.
In a Reddit forum that appears to be an unofficial space for Trader Joe’s Crew members at various stores across the country to communicate, several users recently posted screenshots of another Trader Joe’s corporate letter detailing further pay cuts. According to the letter, which is dated May 3, starting May 17 Trader Joe’s will no longer pay the additional $2 per hour in “thank you” pay to its workers. The letter states, however, that the company will increase its “minimum hiring rate” to $16 per hour and that all employees will receive an hourly raise of 50 cents to $1 per hour. Trader Joe’s will also reduce the minimum number of hours worked necessary to qualify for health insurance from 30 to 28 per week.
Founded in Southern California in 1967, Trader Joe’s has grown to include more than 500 store locations nationwide. In 2019, the company generated an estimated $13.7 billion in net sales. Early last year, Trader Joe’s saw an estimated 16% drop in revenue but has since recovered to pre-pandemic levels, according to a report released last fall.
The Lakeshore Avenue worker, who has been employed at the location for several years, said the company has provided health benefits and a sense of job security. Receiving an additional $4 per hour made a significant difference in being able to financially support themselves. “Even with a company that pays relatively well and has decent benefits, without the pandemic hazard pay, making it work is difficult for a lot of folks,” the crew member said.
Oakland city officials who supported the grocery worker hazard pay ordinance aren’t happy with the company’s decision.
“Trader Joe’s, as one of the largest grocery corporations in the country, should share some of the incredible wealth they’ve accumulated during this pandemic with their frontline workers who are still risking their lives at work day in and day out,” councilmember Nikki Fortunato-Bas, one of the ordinance’s principal authors, said. The Lakeshore Avenue location is in Bas’s district. “While we’ve made progress on vaccinations, we still have a ways to go,” she said about the current risks workers face.
But the pay differential that will now exist between the Lakeshore Avenue and Rockridge stores shows how small features in local laws can create big differences in pay for employees at the same companies, working under virtually identical conditions.
Meanwhile in Berkeley, the Trader Joe’s on University Avenue will have to continue paying its employees hazard pay, in accordance with the ordinance that the city of Berkeley passed in February. Berkeley’s ordinance requires companies with more than 300 employees nationwide to provide $5 hourly hazard pay until the city reaches yellow tier in the state’s COVID-19 risk assessment scale or after 120 days (June 23, 2021). The city considered adding a minimum 2,500 square footage for stores but deleted this from the final proposal that was approved.
The California Grocers Association, which represents about 300 retailers operating 6,000 stores and 150 grocery supply companies sued Oakland on February 3, arguing the grocery hazard pay law that covers the Rockridge Trader Joe’s as well as Whole Foods, Safeway, and other major companies, is unfair. The trade group also filed lawsuits against San Leandro, Daly City, and San Jose, where similar hazard pay ordinances are in effect. The association didn’t respond to a request for an interview.
Employees at the Trader Joe’s on Lakeshore Ave hope that speaking out against their company’s decision to forgo hazard pay will help them realize they are at risk everyday. “I want people to know how emotionally draining it is to work in retail right now with people face-to-face,” one of the trader Joe’s crew members said. “I think that emotional strain is a lot and that extra COVID pay is the bare minimum incentive for having to deal with that tense in-person work right now.”