An effort by Massachusetts stores to classify their big-footed competitor Amazon as a traditional retailer not only failed but the online behemoth ended up with looser rules on Sunday operations.
After failing in their annual attempt to scuttle overtime pay for those working on Sundays, retailers targeted Amazon, which is about to open a massive distribution center on the Fall River/Freetown line. Retailers argued that if every mom and pop store has to pay time-and-a-half to Sunday workers, Amazon should be classified as a retailer and be forced to do the same.
But the $1 billion economic development bill signed into law last week by Governor Charlie Baker not only doesn’t change Amazon’s classification but actually makes it easier for its warehouses to operate on Sunday.
And because it will continue to be classified as a distributor, not a retailer, Amazon won’t have to pay its employees overtime for Sunday work.
That “creates an uneven playing field,” said Jon Hurst, president of the Retailers Association of Massachusetts.
“[Amazon’s] stores may be the smartphone, but their employee bases are in those centers, and they need to be operating under the very same rules, the very same laws, as everybody else,” Hurst said. “Either hold them to the same standard or get rid of the antiquated standard for our small businesses.”
Under the new law, for instance, Amazon will be allowed to employ information technology workers on Sundays in its warehouses. There are also fewer restrictions on moving goods in and out on Sundays, which apply to all warehouses in Massachusetts.
When it opens next month, the 1.2-million-square-foot Fall River facility will employ 500 workers paid an average of $35,000 per year, according to Kenneth Fiola, Jr., executive vice president of the Fall River Office of Economic Development.
It will distribute larger items such as canoes and furniture, Fiola said, in New England and as far south as New York, but it’s unclear whether Amazon will distribute merchandise to Massachusetts locations out of the Fall River facility.
Retailers had pushed lawmakers to regulate Amazon as a retailer and force it to pay workers overtime on Sunday on the grounds that it sells and ships products to Massachusetts households.
Other Amazon operations in the state distribute groceries and other goods to Massachusetts consumers, according to Chris Flynn, president of the Massachusetts Food Association. He believes the new rules would apply to them, as well.
Amazon did not return multiple requests for comment. The office of Attorney General Maura Healey, charged with enforcing labor laws, is currently reviewing the law’s language.
There’s still a “gray area” when it comes down to how Healey interprets — and enforces — the state’s “arcane” blue laws, according to Robert Joy, a partner with Boston-based Morgan, Brown & Joy LLP who practices labor law.
Amazon should avoid Sunday labor fees, but the issue is complicated, Joy said.
“If they’re packaging orders on the conveyor belt that they’re receiving on Sunday through their website, do they become a retailer?” Joy said. “It looks like that kind of an issue hasn’t yet been resolved as to what it means to be someone like Amazon.”
Besides Massachusetts, only Rhode Island has remnants of antiquated blue laws, so the issue doesn’t apply broadly.
Amazon’s Pantry grocery service competes with large chains such as Stop & Shop as well as smaller ones, Flynn said. Such stores are subject to Sunday overtime rules.
While the Fall River operation will handle furniture and the like, not groceries, Flynn is concerned that other Amazon fulfillment centers directly compete with supermarkets.
“If they’re going to get their Wheaties and their paper towels from the [Amazon] fulfillment center, then they’re not going to be going into our stores to buy that,” Flynn said.
The Sunday overtime rule dates to 1982, when stores were initially allowed to open on Sundays.
Attempts to overturn it have been fought by unions, who say retail workers rely on the extra cash they get for working on a Sunday.
“It’s outrageous in these days of income inequality and lack of family time that a profitable corporation wants to skirt laws requiring that they pay time and a half on Sundays,” said Steven A. Tolman, president of umbrella labor group Massachusetts AFL-CIO, in a statement.
The United Food and Commercial Workers Union is “fighting hard to maintain that benefit” for its 17,000 Massachusetts members, which include a large number of Stop & Shop employees, according to Casey Hoag, a national spokesperson for the union.
A series of minimum-wage increases — including an increase to $11 an hour in January — have made it increasingly difficult for small businesses to also pay more on Sundays, said Larry Bearfield, co-owner of Ferns Country Store in Carlisle.
Bearfield said he’s paying six Sunday employees an average of $17.30 per hour to stock wine bottles, stack cases of beer, brew coffee, or bake cinnamon rolls.
“Is that a lot of money? For a small business, yeah, yeah it is,” Bearfield said. “I’ll tell you it’s just a killer. It’s a real killer.”
For Fall River, which has long struggled with unemployment, the decision to court Amazon was a “balancing act,” said Robert Mellion, president of the Fall River Area Chamber of Commerce and Industry Inc.
The notion that Mellion and others “sold themselves to Amazon” at the expense of local businesses doesn’t sit well with the chamber president.
“Frequently, we’re talked down to by people who live north of [I-495],” Mellion said. “It’s lovely to listen to the advice and stories on NPR, but that advice only fits in a perfect world. That advice doesn’t fit in a place where English is a second language and many people didn’t even get through high school.”