Posted On: March 4, 2021

What is Hazard Pay and How Much Is It?

Hazard pay has been a hot topic since COVID-19 hit the U.S.

Unless you work in certain high-risk occupations, you probably haven't thought much about it before. Maybe you joked about deserving hazard pay for a particularly unpleasant task.

But the pandemic has made it relevant to a broader cross-section of the workforce than ever before. Should you be getting hazard pay?

What is Hazard Pay?

As you might guess, hazard pay is extra compensation for employees working under hazardous conditions. It also applies to work that involves "physical hardship," which the U.S. Department of Labor defines as work duty that causes extreme physical discomfort and distress that can't be adequately alleviated by protective devices.

This compensation is sometimes referred to as hazardous pay, instead.

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What Are Some Examples of Hazard Pay Jobs?

Traditionally, hazard pay has been associated with particularly risky tasks in high-fatality occupations. That includes certain jobs in:

  • Construction
  • First responding
  • Logging
  • Fishing
  • Mining
  • Farming or ranching
  • Transportation
  • Work done inside an active war zone

Usually, only the hours spent in hazardous conditions are eligible for hazard pay.

Are There Any Hazard Pay Laws?

According to the Brookings Institute, there are no state or federal laws in the U.S. that require private-sector employers to offer hazard pay.

Federal, state, and local governments sometimes have laws that require hazard pay for their own employees. The Fair Labor Standards Act (FLSA) mentions hazard pay but only to specify that it should be included in overtime calculations for federal employees.

Recently, some local governments have instituted presumably temporary requirements for COVID-19, which we'll discuss below.

In the absence of hazard pay laws for the private sector, employers create their own hazard pay policies. In some cases, they offer hazard pay proactively as an incentive to draw employees and fill job openings. But in most cases, hazard pay is a union matter – in other words, the employers concede hazard pay as a result of employees' collective bargaining.

How Much is Hazard Pay?

Since hazard pay policies come from employers and unions, it varies a lot. There tend to be two basic models:

  • A percentage-based pay increase for time an employee spends in hazardous conditions
  • A flat amount of additional money paid monthly

In either case, there's no universal figure. Hazard pay varies by industry and risk, but as an example, the federal government caps their own employees' hazard pay rates at 25%.

For flat-fee hazard pay, the monthly payment often increases with years of experience. This makes sense because the likelihood of potential health problems (or their severity) tends to rise the longer you do a dangerous job.

Even though the FLSA's hazard pay rule only applies to federal employees, many private-sector policies follow suit and include hazard pay when calculating overtime.

What's the Fuss About Essential Workers' Hazard Pay During the Pandemic?

COVID-19 has put our economy in an unusual situation. Industries that never warranted hazard pay before suddenly carry a significant risk of hospitalization, death, and long-term health effects.

It's not a small population, either. The Brookings Institute estimates there are 50 million essential workers that are unable to perform their function in isolation but necessary for meeting the public's safety, security, and basic needs.

In the earliest months of the pandemic, we saw these risks anecdotally with outbreaks in meat processing plants, distribution centers, and other essential businesses. Now, a year in, we have a growing amount of evidence that essential workers bear a greater risk of infection.

One particularly enlightening study from the University of California San Francisco (UCSF) calculated "excess mortality" during the pandemic by occupation. The study compared pandemic-era fatalities in California to workplace fatalities from previous years.  

Naturally, everyone was more likely to die during the pandemic across the board. For non-essential workers, the increase in risk was 11%.

However, it's clear that the highest excess mortality happens in essential jobs and that many non-healthcare jobs are the riskiest of all. Grouped by industry, the excess mortality ranges from 18% (retail) and 19% (healthcare) to 28% (transportation/logistics) and 39% (food and agriculture).

This study only addresses death. Other analyses show through hospitalizations or testing that risk is elevated in these industries.

Could Essential Workers' Hazard Pay Reduce Their COVID-19 Risk?

The workers who are most at risk are some of the lowest-paid occupations in the country.

The Brookings Institute estimates that nearly half (47%) of all frontline workers earn less than a living wage. They provide a list of the ten largest low-wage essential jobs that pay less than $15 an hour.

And while we tend to think of healthcare as lucrative, the workers with the highest risk are among the lowest paid. An analysis by The Guardian found that nurses and support staff account for most healthcare worker deaths, not physicians. 

There are a few ways that low pay exacerbates the risk that comes from close contact with other people every day. By necessity, low-paid workers have more crowded households and must rely on public transportation.

Additionally, their circumstances mean that, should they catch COVID-19, they face a higher risk of severe disease. Using CDC guidelines on risk factors, one study found that 49.7% of essential workers face an "increased risk" of severe disease, with 61% at "heightened risk." This is because low-income workers have more lifestyle factors that contribute to pre-existing conditions.

Finally, low-wage workers can't afford to isolate themselves when they're exposed, which adds another layer of risk for their coworkers and family members.

COVID-19 hazard pay could help address these risks.

What Happened to the Essential Workers' Hazard Pay Bill?

Many ideas have been floated for an essential workers' hazard pay bill, including the possibility of requiring large businesses who are making significant profits to pay out of pocket while providing government funding for small and struggling employers.

At the beginning of the pandemic, the U.S. House of Representatives passed a bill to create an essential workers' hazard pay fund, but that program died in the Senate.

No federal essential workers' hazard pay bill has come close to passing since. The recently proposed minimum wage increase would have had a similar impact, but the bill seems unlikely to pass with that provision attached.

In the meantime, several states have passed their own COVID-19 hazard pay legislation. Funding at the state level is very limited, so these states were only able to proceed by using federal dollars from the CARES Act that passed in March 2020.  

Pennsylvania and Vermont provided the largest coronavirus essential workers' hazard pay to public and private essential workers in the form of a lump sum. Louisiana provided a more modest payment.

Maryland, Virginia, New Hampshire, and Michigan focused their essential workers' hazard pay bills on the public sector only. Essentially, these programs provided coronavirus hazard pay for healthcare workers funded by Medicaid or state and local governments.

Where Does Coronavirus Hazard Pay Stand Now?

State-level COVID-19 hazard pay initiatives were optional, government-funded, and only calculated to cover roughly 10 weeks. Some companies voluntarily provided coronavirus hazard pay but only in modest amounts and, like the state programs, for a short duration. The average across large corporations was three months, according to Brookings.

In other words, COVID-19 hazard pay ended in the U.S. before the second wave even began, much less the third. Even during that short time, the impact was limited – one poll indicated that only 30% of people working outside the home during the pandemic had received some form of hazard pay.

Most recently, several cities on the west coast, including Santa Monica and Seattle, passed essential workers' hazard pay (or "hero pay") measures in January 2021. These local laws are the first to require coronavirus hazard pay from employers.

Workplace Hazard Protection Starts with Knowledge

Extra compensation for hazardous work can be helpful but minimizing and preventing health and safety hazards is mandatory and life-saving.

The first step in addressing any workplace hazard is making sure the affected workers are aware of the danger and the remedies that are available to keep them safe. That's why OSHA requires employers to provide workplace safety training.

Safety training doesn't have to be expensive or inconvenient. As an OSHA-authorized online training provider, we offer training options from OSHA 10/30 to a large catalog of individual topics.

We also go beyond OSHA. As an organization dedicated to workplace safety, we've developed COVID-19 awareness courses for essential food workers – check out our Health Sanitation Safety and Awareness to learn more about coronavirus transmission and how to stay safe!

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