Hazard Pay During COVID-19 – Who May Be Entitled And What To Do Next

The current COVID-19 crisis has many employees asking (if not demanding) that they receive additional compensation for work that may put them at an increased risk of exposure to the coronavirus.^[i]  Although their requests may seem reasonable to many, especially for those deemed “essential” in this crisis, an employee’s “entitlement” to additional compensation is not so clear.

What is Hazard Pay?

Additional pay for dangerous or physically taxing work is commonly referred to as “hazard pay.” A more apt name for this type of additional compensation however may be “incentive pay.”  The purpose of this increased compensation is to incentivize employees to take on “hazardous duty or work involving physical hardship.”^[ii]  The U.S. Department of Labor defines hazardous work as “[w]ork duty that causes extreme physical discomfort and distress which is not adequately alleviated by protective devices [and] is deemed to impose a physical hardship.”^[iii]  Hazard pay is also forward looking pay that provides additional compensation in advance to mitigate the impacts of potential future harm.  Worker’s compensation insurance and social security disability are post-harm mitigation measures intended to compensate after a worker is injured.

The U.S. Department of Labor does not currently regulate hazard pay and does not require that employers provide hazard pay.^[iv]  An employee is only entitled to hazard pay either through an employment agreement, or in specific instances, where provided by statute. 

Who Typically Receives Hazard Pay?

Federal statutes establish hazard pay for government employees whose duty involves “unusual physical hardship or hazard, and for any hardship or hazard related to asbestos” in an amount not to exceed 25 percent of the employee’s basic pay.^[v]  However, in order to be entitled to the hazard pay incentive, the employee’s work must not be “in a position the classification of which takes into account the degree of physical hardship or hazard involved in the performance of the duties.”^[vi]  Workers whose positions are already known to be hazardous would not receive additional hazard pay.  The hazard entitling a federal worker to additional compensation must therefore be outside the hazards normally encompassed by the worker’s job description.  With respect to COVID-19, federal employees whose job it is to work with deadly infectious diseases on a regular basis would likely not receive hazard pay under the statute. 

The Office of Personnel Management (“OPM”) sets out the pay increases applicable to certain types of hazardous work for federal workers.^[vii]  OPM has published guidelines for federal employees during the current health crisis, reminding employees that a 25 percent hazard pay differential is authorized for employee exposure to “virulent biologicals,” defined as “work with or in close proximity to . . . [m]aterials of micro-organic nature which when introduced into the body are likely to cause serious disease or fatality and for which protective devices do not afford complete protection.”^[viii]  Federal statutes also provide hazard pay for specific types of work performed by federal employees and contractors.  Persons who have served in the United States Armed Forces are likely aware of the numerous incentive pays available to them while on active duty.^[ix]

Federal workers have brought class actions seeking hazard back pay.  In one such case, employees unsuccessfully sought hazard back pay for exposure to second hand smoke in their office space.^[x]  Persons who contract to provide services to government agencies may receive hazard pay incentives as part of their agreements.  Private contractors have brought claims for failure to pay hazard pay included in their contracts for working at U.S. Embassys in dangerous parts of the world and in combat zones.^[xi]  States and local municipalities often provide hazard pay incentives by statute or collective bargaining agreements.^[xii]  Private collective bargaining agreements with labor unions whose workers are involved in potentially hazardous work also may provide for hazard pay.^[xiii]

What about Hazard Pay Options for Workers During COVID-19?

Employees who have not bargained for hazard pay as part of their employment agreements or do not qualify for hazard pay under a federal or state statute are likely not entitled to hazard pay from risks imposed by COVID-19.  Employees who are concerned about COVID-19 exposure, and who are demanding they receive hazard pay, may look for other employment opportunities if their employers are unwilling to provide some form of hazard pay or other incentives for working during the health emergency.  Going forward, as this pandemic continues to grow and hampers life around the globe, employers may find that hazard pay and sick leave are discussed in greater depth during the hiring process.  It is foreseeable that hazard pay and sick leave become an increasingly important component to employee compensation packages.

Employers, especially those with employees deemed essential or working in fields with exposure to the public, should anticipate that employees will seek additional compensation, if they have not already.  While the law may be fairly clear as to an employee’s entitlement to hazard pay today, we are experiencing an evolving and unpredictable world event, and federal, state, and local laws may begin to change rapidly as the crisis drags on.  Employers should consult their employment law attorneys upon receiving hazard pay requests and look for ways to be proactive with their employees.  While employers may not be required to give additional pay, it may be beneficial in the long run for public relations and employee retention purposes.