A few months after the United States declared COVID-19 a public health emergency, the City of Seattle passed an Ordinance requiring hazard pay for gig workers for food delivery network companies (the terms “gig work” and “the gig economy” are used colloquially to describe a business model that pays workers by the task and depends on freelance workers or independent contractors who do not receive protections usually afforded by employees, like the minimum wage, overtime, workers’ compensation, unemployment insurance, and the right to collectively organize and bargain).

The Ordinance expressly stated that the premium pay “protects public health, supports stable incomes, and promotes job retention by ensuring that gig workers are compensated now and for the duration of the public health emergency for the substantial risks, efforts,and expenses they are undertaking to provide essential services in a safe and reliable manner during the COVID-19 emergency”. Under the Ordinance, food delivery network companies had to pay their workers an extra dollar and a quarter for each work-related stop in Seattle. The companies were also obliged not to reduce workers’ compensation or otherwise limit their earning capacity as a result of the ordinance.

The Washington Food Industry Association (that includes stores which depend on delivery services provided for by third parties) and a company directly operating grocery delivery challenged the Ordinance alleging inter alia that it was in breach of a statute under which local governments may not impose or collect any tax, fee or other assessment on groceries. They also claimed that the Ordinance: (i) was in breach of the equal protection clause; (ii) took private property for public use without just compensation in violation of the “taking clause” of the State and the Federal Constitutions; and (iii) impaired existing contractual rights in violation of the contract clauses of the State and the Federal Constitutions.

By judgment of 9 February 2023, the Supreme Court of Washington held that the City’s premium Ordinance did not impose a tax on groceries. The term tax has a common meaning “as a burden or charge imposed by legislative authority to raise money for public purposes or for the public treasury”, the Court noted. On the contrary, the challenged rule required food delivery network companies to pay their workers, and the money flew directly to those workers, not the government or the general public. Accordingly, the Ordinance’s purpose was not that of raising money for the support of the government and such a claim had to be dismissed.

The Court also held that the Ordinance had a rational basis and therefore was not in breach of the equal protection clause. “Though workers in restaurants and grocery stores face risks while providing a similarly essential service of making food available to customers, it is reasonable for the City to view the work of food delivery network drivers as serving a different, additional purpose of minimizing person-to-person contact in otherwise highly trafficked areas; it is likewise reasonable for the City to choose to incentivize that work by requiring premium pay”, the Court held.

As for the remainder of the claims, the Court held that they required factual development and assessment and had thus to be discussed before the trial court in the further course of the proceedings.

Reference: Washington Food Industry Association et al. v. City of Seattle, Supreme Court of Washington, 9 February 2023. 

Full text of the decision available at en