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Hazard Pay: 'When Is It Required?' & 'Who is Eligible?'

A growing number of jurisdictions are requiring employers to provide hazard pay to employees who work on-site during the COVID-19 pandemic. Below are answers to frequently asked questions about hazard pay.

Q: What is hazard pay?

A: In general, hazard pay is a premium paid to employees for working in hazardous or physically demanding conditions. During the pandemic, hazard pay has been provided to certain essential workers whose job duties must be performed on-site and therefore may have a higher risk of exposure to COVID-19 from the public and/or co-workers.

Many employers have offered hazard pay to employees voluntarily. In some states, such as Pennsylvania and Vermont, there are grants available to help employers provide hazard pay to essential workers during the pandemic.

Additionally, some jurisdictions have enacted laws requiring certain employers to provide hazard pay. In some cases, these laws may refer to hazard pay as "hero pay."

Q: Where is hazard pay required?

A: Hazard pay isn't required by federal law in the private sector. However, more than 20 local jurisdictions have approved laws requiring certain employers to provide hazard pay. Some local jurisdictions in the state of Washington, including Seattle and Burien, have enacted mandates on hazard pay. So far, though, most hazard pay requirements have been in the state of California, including but not limited to:

  • American Canyon
  • Berkeley
  • Coachella
  • Concord
  • Costa Mesa
  • Daly City
  • El Monte
  • Glendale
  • Irvine
  • Los Angeles
  • Los Angeles County (unincorporated areas)
  • Long Beach
  • Millbrae
  • Montebello
  • Oakland
  • Palm Springs
  • Pomona
  • Santa Ana
  • Santa Clara County (unincorporated areas)
  • San Francisco
  • San Jose
  • San Leandro
  • San Mateo
  • South San Francisco
  • West Hollywood

Since these laws are being approved at a rapid pace, this isn't an exhaustive list. Check your local laws to determine if you're subject to such requirements. Additionally, some states are contemplating hazard pay laws, so watch closely for potential developments at the state level as well.

Q: Who is required to provide hazard pay?

A: So far, hazard pay mandates have generally been limited to grocery, drug, and/or retail stores. They typically cover employers with a certain number of employees nationally, including those of a parent company or franchisor, as well as a certain number of employees locally. Check your applicable law for details.

Q: If I'm subject to a hazard pay requirement, how much do I need to pay employees?

A: Hazard pay requirements differ but typically have ranged from $3 per hour to $5 per hour. Hazard pay is required on top of an employee's regular rate of pay.

Q: What if I already provide hazard pay to employees?

A: These laws typically allow hazard pay already provided by the employer to count toward meeting the requirement, as long as it's paid under the same terms and conditions of the applicable law.

Q: Do I have to include hazard pay when calculating overtime pay due to an employee?

A: Yes, if you provide hazard pay, it must be included in the determination of an employee's regular rate of pay for overtime purposes. For example, if the employee's base wage is $15 per hour, and the employee receives $5 per hour more in hazard pay, the employee's regular rate of pay for overtime purposes would be $20 per hour (assuming the employee received no other compensation). Under federal law, this employee would be entitled to $30 per hour (1.5 times their regular rate of pay) for any overtime hours worked. Depending on the state, the employee may be entitled to two times their regular rate in certain situations.

Q: How long are hazard pay requirements in effect?

A: It varies by jurisdiction. They may be in effect for a set number of days (such as 60, 90, 120) and/or be tied to other factors. For example, some California ordinances call for the hazard pay requirement to remain in effect for a predetermined amount of time, until the jurisdiction is outside the Yellow tier under the current statewide health order framework, until most employees are vaccinated, or upon expiration of the public health emergency.

Q: Are there any notice and recordkeeping requirements associated with the hazard pay laws?

A: These laws typically require covered employers to post a notice informing employees of their rights under the ordinance. Some also have recordkeeping requirements. For example, Irvine requires covered employers to retain records that document compliance with the ordinance, including payroll records listing hazard pay as a separate item, for a period of two years.

Conclusion:

Determine if you're subject to a hazard pay requirement. If so, you must provide the additional pay required to covered employees, and meet any notice and recordkeeping requirements of your applicable law.

Note: For a brief summary of many of the local hazard pay requirements in California, visit our COVID-19 Resource Center.

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