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Essential workers and hazard duty pay during COVID-19

One of the many topics of discussion during these rapidly changing days of the COVID-19 crisis are local policies designating pay levels for essential workers and for those whose work requires them to be in close contact with those who may be infected with the virus. In non-union environments, policies may cover all workers, while in places with negotiated agreements, these topics are likely to be governed under labor contracts, with only some workers covered by policy.

Essential worker pay

Essential worker pay is often used in circumstances defined by who is required to work, what work employees may be required to perform, and whether or not the work is temporary.

Generally, these policies separate employees into some form of “essential” or “non-essential” classification and who, as a result, must report to duty when the organization itself is shut down or not operating on a normal schedule. These policies often deal with short-term emergencies such as snow conditions, tornados, hurricanes or other relatively short-term events in which not all workers are required to work due to the closure of non-essential government services. In such instances, full time salaried employees not identified as essential are paid during these events, though not required to work, while essential employees are called out to perform those functions required to keep essential or critical services operable. Such events are almost always limited to the time needed to resolve the conditions created by the event and, when conditions return to normal, these persons are still considered essential, but paid a normal wage.

In these policies, the work itself may carry some higher risk for some workers, but the prime differentiator for pay is the fact that not all workers are required to report. While there may be some added risk, many essential employees are not exposed to significant levels of hazard. Pay or accumulated leave time may be enhanced to account for the work requirement when other employees are on administrative or other authorized leave with pay.  The amount of pay differential can vary, but is often similar to overtime or holiday pay and may be one and one-half to two times (1.5X – 2X) regular pay or more.

Pay differentials for hazardous duty

A different set of policies getting more attention in the face of COVID-19 are pay differentials for hazardous duty. They are not mandated by Federal law and, as a rule, are less common than incremental pay enhancements for essential duty workers. When hazardous duty pay is triggered, it is generally because working conditions or the specific risk presented are such that normal job valuation methods are insufficient to ensure organizations can attract or retain people in these roles. Additionally, some organizations adopt hazard pay differentials to help maintain morale and ensure that workers faced with such unusual risk are sufficiently recognized and rewarded, on the belief that it is worthwhile to allow for higher pay to equitably compensate employees meeting preset standards. Those standards may be as simple as identification by position title, job location, or by very specific and detailed triggering conditions, which may only apply to a portion of a worker’s work time. They most often include conditions more stressful or found in unavoidably noxious environments and/or that carry extraordinary exposure to the risk of injury or death.

The standards for hazardous duty pay are best established by policy or ordinance, so to lend objectivity to the process and to avoid claims of bias in implementation. Particularly when implementing standing policy, legal input should be sought and care must be taken to ensure that the risks included in the policy are thoroughly assessed across the entire organization in order to protect against discrimination claims. Paying hazardous duty pay to a desk sergeant at moderate risk of exposure, while leaving out the mail clerk with an equal or higher level of risk may be called into question.

Today, there are certainly local government front line workers involved in COVID-19 responses who are being exposed to a great deal more risk than they might otherwise encounter. Stories abound of doctors, nurses, medics and others who, upon exposure, are becoming ill with COVID-19 and some, regrettably, dying from it. In addition, there are stories - as yet unproven - that suggest in some instances there may be long-term effects for certain persons.

So, who is offering hazard pay and where can you find a sample policy? WorldatWork, the Total Reward Association, posted a poll on this issue on their website dated April 2, 2020.  (https://www.worldatwork.org/workspan/articles/how-organizations-are-handling-rewards-and-hazard-pay-decisions-in-a-covid-19-world) The poll found that 65% of survey respondents weren’t paying cash, but offered various perks, while 9% had no plans to offer any incentives or spot bonuses (hazard pay). A total of 26% of respondents were offering some form of cash bonus or incentives, making either cash or perks far more common than not.

As to hazard pay policies, they are less commonly found in local government than in private industry and guidance on the creation of standards are consequently harder to find. The pay system with the highest degree of sophistication is arguably the Federal Government. It mandates hazardous duty pay in both of its primary pay systems, the Federal Wage System (FWS) and the General Schedule (GS). For GS employees, § 5 U.S.C. 5545(d) of the Federal Code establishes hazard pay differentials for certain situations as set forth in the Appendix to Subpart I of Part 550. e-CFR. Section 550.903 of the e-CFR allows for “A schedule of hazard pay differentials, the hazardous duties or duties involving physical hardship for which they are payable, and the period during which they are payable….”

The section most likely to be used for exposure to viral pathogens indicates that qualifying GS workers may receive 25% pay differential for:

Exposure to Hazardous Agents, work with or in close proximity to:

(5) Virulent biologicals. Materials 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”.

Local government policies may and do differ, but not notably, the common theme for both types of Federal workers is that they are paid when in contact with the substance or engaged in the condition, and that protective devices are insufficient to ensure protection from infection or, in case of FWS workers, vaccines and other safety measures do not exist which practically eliminate the potential for personal injury.

Baker Tilly’s compensation specialists are available to assist state and local governments in need of information for creating a hazard pay policy.

For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team. 

Steve Miner
Director, Ed.D./J.D.
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