What should we do if employees are asking for hazard pay?

By Audra Hedberg, PHR, PHRca, SHRM-CP, Senior Compliance Consultant at Trüpp

An employer’s guide to implementing hazard pay

While many businesses are facing drastic cuts or even closing completely, others are fortunate to continue business operations including online retailers, grocery stores, and pharmacies. Employees that work for these essential businesses are taking on extra shifts, accommodating a significantly changed work environment, and navigating government health requirements and guidance that can be unsettling; especially for workers in highly public-facing jobs. As employees become increasingly concerned that performing the duties of their jobs poses risk to themselves and their family members, many are voicing those concerns by requesting hazard pay.

With large companies like Amazon, Walmart, and Target providing hazard pay, this topic is becoming front of mind for employers whose jobs place employees at inflated risk for exposure to COVID-19. However, there are currently no federal or state regulations that require employers to pay additional amounts for hazardous work, leaving employers to navigate these waters on their own.

Here are steps an employer can take when considering implementing hazard pay.

1. Consider criteria for eligibility and communicate your policy 

It is in the employer’s best interest to clearly define how the company determines who and when employees are eligible for hazard pay. This may include working conditions, specific positions, and work shifts or locations. Outline if the hazard pay will be offered on a temporary basis or indefinitely. If it’s a temporary solution, establish and clearly communicate the effective start and end dates.

2. Determine how to implement

Provide written communication to any employees who will receive pay or status change. This communication should include:

• Start and end date of the additional pay (if temporary);
• Specific criteria for how hazard pay will be determined and the method of how it will be paid (e.g., a separate “hazard pay” item on their pay stubs, determined by the work hour or shift);
• Instructions for how employees should track or enter work time that is deemed eligible for hazard pay; and,
• Your company’s hazard pay policy or reference to that policy;

Keep in mind some states (e.g., California, Maryland, and New York) require additional notice to employees whenever there are changes to pay rates and other pay-related information. Also, it’s important to inform human resources employees as well as payroll providers of the hazard pay process and to establish a separate payroll code for the additional pay (rather than including the pay with employees’ standard wages).

3. Consider the potential for the upcoming federal relief bill

There is a federal bill on the table that calls on employers to provide retroactive hazard pay to frontline and other essential workers. While we await additional guidance from the government, some states like Pennsylvania, Vermont, and Virginia have leveraged federal relief dollars to provide hazard pay to front-line workers.