Hazard Pay – What Is it and How to Apply

With COVID-19 on the rise, stay-at-home orders are in place again to minimize the spread of coronavirus. However, if you’re an essential worker, you’ve probably been reporting for duty throughout the pandemic.

If you’re one of the brave individuals on the frontlines maintaining our social and economic infrastructure, thank you!

You might be wondering if working during the current pandemic entitles you to hazard pay. In this guide, we review what hazard pay is, eligibility requirements, how to apply for hazard pay, the effect on your paycheck, and more.

What is hazard pay? 

The U.S. Department of Labor defines hazard pay as “additional pay for performing hazardous duties or work involving physical hardship.” Simply put, it’s extra compensation on top of what you already earn in exchange for the danger your job duties pose. 

The March CARES Act Federal stimulus was signed without hazard pay assistance, prompting an outcry among essential workers. Early in April Senate Democrats proposed a $25,000 hazard pay increase for essential workers in the HEROES Act, which was ultimately dropped from the proposal in September. The HEALS Act proposed by Republicans in July did not include hazard pay, and ultimately the final stimulus bill passed in December did not mention hazard pay either.  

Several states, chiefly Pennsylvania, Vermont, and Louisiana, stepped up and used CARES Act funds to create hazard pay programs for private and public sectors. Maryland, New Hampshire, Michigan, and Virginia also provided funds for limited public sector industries.

Who qualifies for hazard pay? 

The U.S. Department of Labor does not currently regulate hazard pay nor require that employers provide hazard pay.

It’s up to individual states and employers to decide who qualifies for additional compensation. Each employer must also decide on the rate and duration for hazard pay.

What constitutes a dangerous environment in the eyes of employers? Beyond healthcare facilities flooded with COVID-19 patients, construction sites, steel mills, war zones, and settings where inclement weather is a factor are also hazardous. Given widespread shelter in place orders, hazard pay could apply to those working in grocery stores, construction sites, mailrooms, sanitation jobs, and other essential jobs. 

For example, in Pennsylvania and Louisiana, only public and private employees in critical industries were eligible. Act 136 defined eligible industries in Vermont, including public health and safety, health care, human services, and other essential service providers. Each program has specific income and work hour requirements.

In December 2020 the Senate overrode Trump’s veto to pass the National Defense Authorization Act(NDAA), with continuing hazard pay for service members in combat zones and those fighting the pandemic.

What do you need to apply for hazard pay? 

Employers were responsible for applying for the hazard pay programs created by individual states. Outside of the state programs, there’s no formal application per se to apply for hazard pay. 

In most instances, an employer will discuss the risks of the role and hazard pay with prospective employees before entering into an employment agreement. When work commences, human resources ensures that you are compensated accordingly. Currently, hazard pay is completely dependent on employer actions and funds availability.

How much extra compensation could you receive?

According to the Office of Personnel Management, employees may receive hazard pay of up to 25% of their basic pay rate. The following states provided payments of up to the following amounts per eligible employee:

Pennsylvania –  $1,200 one time

Louisiana – $250 one time

Vermont – $1,200 or $2,000 one time

Virginia – $1,500 one time

Michigan – $1,000 one time

New Hampshire – $300/week

Maryland – $5.13 per hour raise

In many states, funds quickly ran out. For example, there were 5,000 employers eligible in Pennsylvania, but less than 10% of the need was met.

Alternatively, individual employers can fund and determine the rate for hazard pay. Some will offer it as a flat percentage of your hourly rate for the time spent in hazardous conditions. Others only pay a set fee each month, no matter how many hours you work.  

In the spring, Amazon temporarily increased hourly minimum wages to $17 per hour from $15 and raised overtime pay for warehouse workers. A slew of grocery chains also increased hourly pay by $2 an hour, including Albertsons, Kroger, and Rite Aid.

By the summer of 2020, all of these programs had quietly ended.

Under the NDAA, qualifying military service members will see maximum payouts increase from $250 a month to $275 a month. Troops serving in hostile fire areas or combat zones are already able to receive up to $450 a month in extra pay.

Unsure of your employer’s policies on hazard pay?

Reach out to the human resources department to inquire. They’re not legally obligated to extend this benefit in exchange for less than ideal working conditions. However, some employers offer additional compensation as a courtesy. A few have offered additional hazard pay accommodations this year. It’s also a good idea to review your employment contract for more information about hazard pay. 

Want your government or stimulus money early?

You can get paid up to 2 days ahead of time with a MoneyLion RoarMoney account. RoarMoney offers secure banking with cashback and no balance minimums, all for $1 a month.

You can also gain access to Instacash up to $250 when you link your RoarMoney bank account. With Instacash, you can get an advance on your paycheck or direct payments.

A Final Thought

Essential workers have been understandably worried about their safety during the pandemic. While hazard pay compensation related to COVID-19 was proposed in Congress, these initiatives could not pass into law. A handful of states took the initiative to use federal money to create programs, and employers had to apply for funding.

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