Trader Joe’s temporarily raises pay by $4 per hour for all employees, but cancels midyear raises

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Popular grocery retailer Trader Joe's announced this week that it would temporarily raise its pay for all employees amidst the still-raging COVID-19 pandemic.

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"Since the beginning of the pandemic, Trader Joe’s has provided all hourly Crew Members with an additional $2/hr 'thank you' wage, in recognition of the outstanding, inspiring work they do every day, in our stores and communities," the company wrote in a Monday update on its website.

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"Effective February 1, 2021, the 'thank you' premium for all hourly, non-management Crew Members, was increased by two dollars, for a total of $4 an hour," it said.

Although the post does not reference Seattle, the company's move follows the approval of a new city mandate that requires a $4-an-hour hazard pay for the duration of the pandemic.

Nevertheless, a letter to Seattle employees obtained by The Seattle Times revealed that the company had indeed acted in response to the ordinance.

“After seeing this occur with a few cities in California and Washington we have determined that such actions are unfair for all stores throughout the Company,” Trader Joe’s management wrote. “Accordingly, effective February 1, we will increase our ‘thank you pay’ for all Crew Members by two dollars, making the ‘thank you pay’ equal to $4 company wide.”

Furthermore, the chain also said it would cancel its summer 2021 midyear raises — although, those raises are only a fraction of "thank you pay" — and that the $4 increase would continue throughout the course of the pandemic or until employees are “eligible for vaccines as ‘grocery workers.'”

Seattle's law applies to large grocery stores with more than 500 employees in total.

KROGER CLOSES 2 SOUTHERN CALIFORNIA STORES RATHER THAN GIVE EXTRA $4 'HERO PAY’

Mandatory pay-raise legislation has been met with mixed reviews in both Seattle and California, where Long Beach and Los Angeles have both pledged to "hero pay" increases for certain essential workers.

The California Grocers Association came out strongly against such legislation and retailer Kroger said it would be forced to close two of its stores after the City Council approved a $4-per-hour raise.

In a public letter to Democratic Mayor Jenny Durkan, PCC Community Markets CEO Suzy Monford sounded the alarm about the potential negative consequences of the pay raises.

“We are so concerned about the impact of the Hazard Pay Ordinance on independent grocers like us, that we feel we have no choice other than to share our concern," she said.

"Unlike large corporate grocers who saw a large sustained uptick in sales nationwide, we have not had a sustained increase in sales and do not have a national footprint to rely on to offset these costs nor the cost of doing business in Seattle," wrote Monford, noting that while PCC had net income of $1.7 million in 2019 it had hemorrhaged $3 million in COVID-related expenses last year.

"The cost of COVID response, including the safety controls that we have committed to in order to keep our staff safe and the additional pay, have cut our margins to the bone," she warned.

However, local politicians voiced their support for the mandated pay hikes to KING 5 on Tuesday.

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Durkan is set to sign the legislation on Wednesday, and it will go into effect immediately.

Attempts made by FOX Business to reach out to both Trader Joe’s and Durkan's office were did not get an immediate response.

The Associated Press contributed to this report.

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