IS THERE SUCH A THING AS “HAZARD PAY”?

In the midst of the Coronavirus pandemic, employees are going to work in what many would call the “front lines”, including doctors and nurses at hospitals as well as cashiers and delivery persons at local grocery stores. As we face this dangerous enemy called COVID 19, many are asking, “Is there really such a thing as “hazard pay” for those employees who still have to go to their workplace while others are able to work from home?”

Interestingly, even though the term “hazard pay” is commonly used, the Fair Labor Standards Act (FLSA), which governs the federal minimum wage rate and overtime pay eligibility for full-time and part-time workers in the private sector and in federal, state, and local governments, does not address the subject of hazard pay. Furthermore, no states presently have any requirement for hazard pay within their minimum wage rate requirements. As it currently stands, hazard pay is not legally required of any employer other than certain federal employees working under specific classifications and employees working under separate agreements derived through union related collective bargaining agreements. Nonetheless, the issue of employees now working the front lines during this pandemic being entitled to hazard pay seems to be a common question. And it requires a legal answer.

What is hazard pay? Generally, the concept of hazard pay calls for employers to pay their employees additional amounts when those employees are performing work that may be considered dangerous or entails physical hardship, especially if protective devices are not able to limit or specifically reduce the danger or hardship involved in that employee’s work. Again, other than for certain federal employees or those employees in unions who have negotiated the right to receive these additional amounts, hazard pay, even in the midst of a crisis, is not required to be paid by any private employer or state or local government employer.  Therefore, any employee requesting “hazard pay” would essentially be seeking to renegotiate their compensation based on these current conditions.

If paid, hazard pay would be in addition to an employee’s regular hourly wages or annual salary. The only legal clarification necessary under the FLSA would be that if hazard pay is provided to a non-exempt employee it would need be included as part of that employee’s regular rate of pay and, therefore, included in the computation of the employee’s overtime pay, if applicable. Hazard pay could be paid as a “premium” to the normal hourly wage or alternatively could be issued as a flat amount each week or month.

Under federal, state or local law, one of the complications in offering hazard pay is creating a legal definition of what makes conditions of work “hazardous”. In general, examples of such work would involve working in dangerous weather environments or in locations subject to hostile actions or war. But these days, hazardous conditions could just as easily include working at any healthcare facility or at a local restaurant or grocery store, all environments that could expose a worker to the novel virus.

This idea of workers being entitled to hazard pay is one reason why you may be seeing in the news many state and local initiatives requiring that hazard pay be provided to employees who continue to work in the midst of this crisis. Currently states like Vermont, Massachusetts, Ohio and Maine have legislation pending that would require that employees working in certain occupations and in certain locations receive hazard pay. Many city councils have taken the lead in addressing the issue of hazard pay for the government workers who work in essential services for local municipalities. For example, the Mayor for the City of Atlanta, Georgia recently issued an Executive Order granting $500 per month hazard pay bonuses to its safety and sanitation workers. Similarly, the State of Massachusetts recently reached an agreement with its State, County and Municipal Employee Union for its healthcare workers to receive additional hazard pay.

 As it stands now, even if these front line workers are being heroic in the work they are performing, there is no current federal, state or local requirement for any private employer to issue “hazard pay”. But employers need to understand that these laws are changing daily and what may not be required today may be required tomorrow. 

For thirty years, Scott Zucker has acted as outside legal counsel to a variety of privately held and publicly traded businesses involved in multiple industries. His legal services range from employment, real estate, construction and corporate consulting to representation of companies in the litigation of their financial and business disputes. Scott’s goal is to utilize his legal and business experience to foster the use of Alternative Dispute Resolution to help parties reach resolutions without the time, effort and cost of court litigation. Scott can be reached at [email protected] or www.EpicADR.com