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Essential Workers: Hazard Pay and Incentives

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Hazard Pay
Although not currently mandated by federal law, hazard pay—extra pay for doing dangerous work—might be appropriate for an employer to offer to essential workers. If hazard pay is offered, similarly situated employees should be treated the same. Otherwise, the employer risks facing a discrimination claim. Companies with multistate operations may have legitimate reasons for offering hazard pay to employees working at locations with a high risk of exposure and not where the risk is minimal. Hazard pay might be a good choice for public-facing jobs, where employees may not be able to observe social distancing. (Source: What to Do When Scared Workers Don't Report to Work Due to COVID-19 SHRM | Apr 2020)

A March 24 WorldatWork poll asked about hazard pay incentives, such as spot bonuses, for employees who are required to work onsite during the pandemic. The findings, drawn from responses from 267 organizations, revealed that 26 percent plan to provide hazard pay, either as a flat-dollar cash incentive; a cash incentive tied to hours and shifts worked; or bonuses based on a different formula, such as a percentage of salary.

Meanwhile, 65 percent of respondents with workers onsite said they were not planning on offering extra hazard pay but instead would provide perks such as free meals.

Similarly, the Willis Towers Watson survey of large U.S. companies found that many were offering compensation to employees who continued to work during the pandemic:

Pay premiums for critical employees. Eight percent were providing pay premiums (typically 10 percent above baseline compensation) for mission-critical employees and employees who must be present at work and have increased risk. About one-third of respondents either will or might do the same.

Subsidies for working remotely. Nearly 17 percent of employers are providing subsidies to manage the cost of working remotely, including for Wi-Fi, child care, borrowed office equipment, and heat and electricity. Almost a quarter (23 percent) either will do so or are considering doing so in the future. (Source: Pandemic Forces Employers to Cut Pay SHRM | Mar 2020)

Hazardous Duty Pay Policy: By Position and Location
SHRM Sample

** Are companies providing additional pay to on-site employees?
** On average, regardless of method of payment, what percentage of additional pay is being provided to the majority of eligible employees?
(See the section titled On-site Employee Support)
In the United States, how are companies adapting to the COVID-19 business and workforce environment?
Mercer | May 2020

How Organizations Are Handling Rewards and Hazard Pay Decisions in a COVID-19 World
WorldatWork | Apr 2020

Hazard Pay During COVID-19 – Who May Be Entitled And What To Do Next
McManis Faulkner | Apr 2020

PPP Expansion Signed into Law. Is Hazard Pay Next?
Obermayer | Apr 2020

Worker Exposure Risk to COVID-19
OSHA

Related Reading

Hazard Pay Proposed in Heroes Act
7 Facts On Essential Workers Hazard Pay That You Need To Know Now
Forbes | May 20, 2020

Incentives
PepsiCo is among a growing number of companies across the country that are boosting pay for front-line workers, continuing to pay those who are unable to work because of COVID-19, and offering other assistance to employees who are impacted by the coronavirus pandemic. Implementing such measures is important because employees "are the backbone of our company," said Patrick McLaughlin, chief human resources officer of PepsiCo Foods North America.
These Companies Put Employees First During Pandemic
SHRM | Apr 2020

Lowe's to give 'special payment' of $300 to all full-time workers in May, $150 to seasonal and part-time workers
Market Watch | May 2020

Companies offer employee bonuses during COVID-19 pandemic
Food Engineering Magazine | Mar 2020

Bonuses in the Time of COVID: Avoiding California Pitfalls
Seyfarth | Apr 2020

Index of COVID-19/Coronavirus Express Requests

Reopening Your Workplace
Reopening Your Workplace: Overviews
Recalling/Rehiring Employees
When Employees Refuse to Return to Work
Addressing Fears About Returning to the Workplace
Masks/Face Coverings in the Workplace

Testing/Screening for COVID-19
Antibody Testing (or Not)
Testing Employees for COVID-19
Taking Employee Temperatures

Employee Relations
Accommodating Workers at Higher Risk for Severe Illness
COVID-19 Myth Busters
Responding to Employee's COVID-19 Diagnosis
Contact-Tracing in the Workplace
EEOC Updates Coronavirus-Related Guidance
Communicating with Employees
Death of an Employee
How to Support a Grieving Employee

Talent Acquisition
Preemployment Background Checks During COVID-19
Completing Form I-9 for Remote Workers
Documenting an Expired Driver's License on I-9 and E-Verify

Families First Coronavirus Response Act (FFCRA)
General (Overviews, DOL Resources, More)
Summer Child Care
Employers' Frequently Asked Questions
IRS FAQs on Tax Credits & Required Documentation
Decision Flow Charts
Valuing Health Plan Costs for Tax Credits
Health Care Provider/Emergency Responder (Employee) Exclusion

Coronavirus Aid, Relief and Economic Security (CARES) Act
Overviews of Implications for Employers
Employee Retention Tax Credit
Business & Nonprofit Relief
Direct Payments to Individuals (Stimulus Checks/Direct Deposit)
Employee Benefit Plan Provisions
Paycheck Protection Program (SBA loans) 
Paycheck Protection Program (Loan Forgiveness)
Unemployment Expansion & Extension
Potential Relief for Government Contractors
Valuing Health Plan Costs for Tax Credits

Essential Businesses and Workers
Essential Business Designation
Essential Workers: Identifying
Essential Workers: Hazard Pay and Incentives

Compensation and Benefits
COBRA Deadlines Temporarily Extended
Various Benefit Plan Deadline Extensions
Survey Reports: Pay Adjustments Amid COVID-19
Families First Coronavirus Response Act (Paid Leave; Enhanced FMLA; More)
USERRA and COVID-19
Reducing Employer's Retirement Plan Contribution/Match
U.S. Wage and Hour Issues
Making Tax-Favored Disaster Relief Payments to Employees
Leave Donation Programs
IRS Relaxes HDHP Rules

Remote Workers
Allowing Telework
Engaging Remote Workers
Remote Work & State Tax Issues
Monitoring Remote Workers

Layoffs and Alternatives to Layoffs
Pay Reductions
Shared-Work/Work Share Programs
Layoff Alternatives
Worker Adjustment and Retraining Notification (WARN) Act
California EDD Work Sharing Program
Please also see under CARES Act (above):
Employee Retention Credit
Paycheck Protection Program

General
New OSHA Guidance on Recording COVID-19 Cases Effective May 26
Employer Resource Centers (U.S. and Global)
Preparedness Plan
Beware Phishing Scams

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