- Hazard Pay During COVID-19 For Essential Employees
- What is Hazard Pay?
- Is my Company Required to Offer Hazard Pay?
- Who is Eligible for Hazard Pay?
- What is the “Heroes Fund”?
- What is the Usual Hazard Pay Rate?
- What other Incentives Can Employers Give Besides Hazard Pay?
- Caution Ahead! Have You Heard of Hazard Pay?
- What is hazard pay?
- Is hazard pay mandatory?
- How much is hazard pay?
- Hazardous pay and COVID-19
- Creating a hazard pay policy
Hazard Pay During COVID-19 For Essential Employees
Updated: May 14, 2020
If you’re an HR professional working for an essential business amid the Coronavirus pandemic, the concept of hazard pay has ly been on your mind in the last few weeks.
As essential employees can’t work from home, many of them are asking for additional compensation concerning the risk of exposure to the virus for them and their families.
And though the recent FFCRA and CARES laws address scenarios such as furloughs, layoffs, and paid sick leaves, the government has yet to offer benefits for essential workers.
Moreover, we have also seen essential employers all over the USA cutting back on wage increases, despite the continued threat of COVID-19 for employees. The gradual lifting of shelter-in-place orders is ly a reason for businesses walking back on previous increases.
Regardless — whether your employees are requesting hazard pay, or you’re looking for a way to incentivize them and support them during this difficult time, here’s a guide to how hazard pay works, and what you can expect from the government in the near future.
What is Hazard Pay?
Hazard pay is additional compensation given to employees that perform work that is dangerous or can cause physical harm, and even with protective devices, the employee is still prone to injury.
Is my Company Required to Offer Hazard Pay?
Up to this point in time, neither federal nor state laws require that companies provide hazard pay. However, many employers have decided to offer it as a way to recognize their employee’s commitment to work during the pandemic.
Alongside companies’ initiatives to reward their workers, Congress is currently studying a proposal called the “Heroes Fund,” requesting additional pay for essential workers. And states Vermont, Ohio, and Massachusetts, are starting to consider their own hazard pay legislation for essential employees. However, none of these laws are confirmed yet.
Who is Eligible for Hazard Pay?
If federal and state laws for COVID-19 hazard pay are approved, they will only be available for essential business workers. For reference, here’s the list of industries that the federal government believed essential back in March 2020.
Since then, however, this list has been up for debate, so future COVID-19 laws will provide a precise definition of who is considered “essential” and eligible for any type of benefit or additional compensation.
More information on hazard pay eligibility will come once legislations become official.
What is the “Heroes Fund”?
The Pandemic Premium Pay Fund, or COVID-19 “Heroes Fund” is a proposal by the Senate Democrats, introduced on April 7, that requests the federal government to finance a “premium pay” for essential workers during the pandemic.
The proposal reads, “Essential frontline workers are the true heroes of America’s COVID-19 pandemic response,” and consist of these premises:
- For essential frontline workers: An additional $13 an hour, through December 31, 2020, or capped at:
- $25,000 for workers earning less than $200,000 per year; or
- $5,000 for workers earning more than $200,000 per year.
- Recruitment incentive: a one-time premium of $15,000 offered to health care companies to recruit additional workers during the following months.
The “Heroes Fund” is still under consideration, but once it passes, qualifiable employers would receive the premiums and distribute them accordingly among their employees. Additionally, the premium pay applies retroactively, so essential employees should receive the supplementary compensation from the moment the COVID-19 crisis began.
Employers would also be responsible for keeping payment records and returning any unspent funds to the government.
What is the Usual Hazard Pay Rate?
As companies aren’t legally required to offer hazard pay, they have the freedom to decide the rate they will provide. For instance, some companies, Costco or Target, are currently paying $2 more per hour, while others are offering daily, weekly or one-time bonuses starting at $100.
Note: If your company decides to provide hazard pay to essential employees, the Fair Labor Standards Act (FLSA) does require employers to include it as part of non-exempt employee’s regular rate of pay when computing their overtime pay.
What other Incentives Can Employers Give Besides Hazard Pay?
If an increase in the worker’s salary isn’t an option, but the company still wants to reward their commitment, here are some other perks companies are offering to show their support:
- Catering meals to the office (packaged individually for safety)
- e-gift cards for local restaurants
- Additional paid sick leave
- Additional paid time off to be used once the crisis passes
- Covering child care assistance
- Cover COVID-19 testing costs
We commend you for considering offering an incentive for workers exposed to the virus. HR professionals are the liaison between employees and businesses, and supporting workers in this difficult time will go a long way in defining your company’s legacy.
The GoCo team is working hard to support HR pros through COVID-19. Visit our COVID-19 Resource Center for more tools and tips
Caution Ahead! Have You Heard of Hazard Pay?
If you have employees who work in hazardous conditions, you may want to give them additional compensation for performing dangerous job duties. This is where hazard pay comes into play. Learn all about hazard pay, whether or not it’s mandatory, and how to create a hazard pay policy.
What is hazard pay?
Hazard pay is additional compensation employees who work under hazardous conditions receive. Employees may also receive hazard pay if their work involves physical hardship. The Department of Labor defines physical hardship as “Work duty that causes extreme physical discomfort and distress which is not adequately alleviated by protective devices.”
Essentially, hazard pay is an incentive businesses can offer in exchange for employees to perform dangerous job duties.
Hazard pay is common in industries with hazardous work conditions. Some fields with hazardous conditions may include:
- War zones
- Dangerous or extreme weather
Is hazard pay mandatory?
There is no law requiring employers to offer hazard pay to employees working in hazardous conditions. In most cases, the employer determines if they want to offer hazard pay, how much the hazard pay will be, and which employees qualify for it.
The Fair Labor Standards Act (FLSA) does not require businesses to offer employees hazard pay. And, there are currently no statewide laws that make it mandatory for private sector employers to provide hazard pay. The FLSA also does not require it for employees working during COVID-19.
However, there are some federal statutes that require hazard pay for federal employees who perform specific types of hazardous work. And some localities, Birmingham City, Alabama, mandate hazard pay for local government workers.
Check with your state and local laws to ensure you’re compliant with any hazard pay laws and requirements.
How much is hazard pay?
Again, hazard pay rates are left up to the employer. Generally, hazard pay is given in addition to regular wages. And, an employee typically only receives hazardous duty pay for the hours where they worked in hazardous conditions.
In most cases, hazard pay is an increased hourly pay rate. Some employers may offer a flat percentage for time spent in hazardous conditions (e.g., 10% premium while working in hazardous conditions).
Others may offer a set fee each month, regardless of how many hazardous hours an employee works. For example, you may pay an employee a flat $350 in hazard pay per month in addition to their regular wages.
Can employees who earn hazard pay still earn overtime pay? Yes, nonexempt employees can receive overtime in addition to hazard pay. Employees are paid overtime their total earnings, which includes regular wages plus the hazard pay.
Hazardous pay and COVID-19
The current COVID-19 climate has many employees asking for additional compensation for work that may put them at increased risk of exposure to the coronavirus. Some employers have begun offering hazard pay to compensate employees for the additional risk.
Although some legislation requiring hazard pay for essential workers during COVID-19 has been introduced (e.g., Heroes Fund), nothing is set in stone yet.
In light of COVID-19, some states (e.g., Massachusetts) and cities are taking things into their own hands and are introducing hazard pay legislation for essential frontline workers.
Essential frontline workers are the employees who are most ly to receive hazard pay in regards to the pandemic. These employees have a higher risk of being exposed to COVID-19. Although each state’s definition of “essential frontline worker” varies, it typically includes:
- Doctors and nurses
- Lab technicians
- Law enforcement
- Postal workers
- Delivery and truck drivers
- Grocery store workers
Again, private sector small businesses are not obligated to provide hazard pay to essential frontline workers unless a statute or state or local law requires it. Check with your state and locality for more information about COVID-19 hazardous pay and hazard pay for healthcare workers.
Creating a hazard pay policy
Thinking abfering hazard pay to your employees? Great! Then you’ll need to establish a hazard pay policy. Your policy should outline the following information:
- Which employees qualify for hazard pay
- Jobs that are considered hazardous
- How much employees can receive hazard pay
- Whether the pay is a percentage or flat rate
- A breakdown of hazard pay laws, if applicable (e.g., local government law)
- Whether or not hazard pay applies to workplace conditions during COVID-19
Once you establish your policy, have employees read it over and sign a copy of it. Keep the signed employee copies in your records for safekeeping. Include your hazardous pay policy in your employee handbook for easy access.
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This is not intended as legal advice; for more information, please click here.