Dive Brief:

• Trader Joe’s has doubled the temporary pandemic-related compensation premium it provides its frontline employees nationwide to $4 per hour, effective Feb. 1, the grocery chain said in an update on its website.
• The grocer has also informed store workers that as a result of the boost, they will not receive the mid-year pay raises they would otherwise have been eligible for this summer, according to a staff bulletin published by The Seattle Times.
• ​The announcement by Trader Joe’s follows decisions by Seattle and several California cities to require additional compensation for grocery workers as recognition for their efforts to keep stores running during the COVID-19 crisis.

Dive Insight:

Trader Joe’s is taking action as the pressure politicians and labor leaders have been exerting on grocers to provide additional hazard pay to their workers has started turning into government-imposed requirements.

The hourly premium Trader Joe’s is now providing to its non-management workers matches the amount specified by some municipalities that have passed hazard pay ordinances. Among those cities is Seattle, which is requiring grocery chains that have more than 500 workers anywhere in the world to give their workers in the city $4 per hour in additional pay starting Wednesday.

Lawmakers in other cities, such as the California cities of Oakland, Long Beach and Los Angeles, have passed or are considering ordinances to force grocers to provide workers with $5 in extra hourly pay because of the pandemic, setting up a potentially uncomfortable situation for Trader Joe’s.

According to the employee bulletin posted inside a Seattle store and published by The Seattle Times, Trader Joe’s concluded that it had to raise its pandemic pay premium, which had been $2 per hour since early in the crisis, to be fair to its entire workforce. The chain, which operates in 42 states and the District of Columbia, said it will still conduct crew member reviews this summer but that it is canceling mid-year raises, and that it will not go beyond $4 in hourly hazard pay except in areas where it is required to do so. 

In addition, Trader Joe’s warned workers that if cities require stores to pay more than a $4 hourly bump or extend the timing of their ordinances, it will need to take additional actions, which it did not specify.

Supermarket chains have had an uneven relationship with their employees and advocates for grocery workers since the pandemic began. Grocers initially earned praise for rushing to give workers temporary rounds of extra compensation, often dubbed "hero pay," and other benefits as the public health crisis began gripping society. But those accolades turned into recriminations as many grocers ended their extra pay programs.

At the same time, grocers have lobbied for their workers to receive priority access to COVID-19 vaccinations as well as tests and personal protective equipment. Since the start of 2021, a number of grocery chains, including Aldi, Lidl, and reportedly Trader Joe's have offered stipends to workers to encourage them to get vaccinated against the disease.

The decision by Trader Joe’s to increase pay for its workers drew praise from the United Food and Commercial Workers (UFCW) International Union, which characterized the move as a response to steps taken by local governments to require additional pay for grocery workers. In a statement, the union also called out grocers that have resisted local requirements making hazard pay compulsory.