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What Is Hazard Pay And Why Does It Matter?

Understand Hazard pay for essential workers

Employees and workers are entitled to benefits and compensation as may be prescribed by law. Some receive more benefits than others, either due to the knowledge, skill, and talent needed in performing the job, as well as the inherent difficulty associated with it. Whatever the case may be, all must be receive salary and compensation commensurate to their job and performance.

Among the benefits or additional pay that employees or workers received which is not available to all or everyone, is hazard pay. Only certain people employed in some specific jobs are entitled to hazard pay. What is exactly a hazard pay, and why not everyone is entitled to it?

What is hazard pay?

Hazard pay, in simple terms, is an additional payment given to an employee for performing, jobs, tasks, and duties deemed hazardous or dangerous. It may also include workers having jobs that are considered distressing, involve physical hardship, or great discomfort.  

The term “additional” needs to be emphasized. Hazard pay is a payment altogether different from the standard salary, benefits, and compensation to which a worker may be entitled. One who is employed under hazardous conditions must receive hazard pay on top of their salary and other benefits.

The Fair Labor Standards Act (FLSA) does not specifically state that hazard pay is mandatory. However, certain businesses do have payment structures that include hazard pay. Some states also have federal laws requiring that certain compensation must be accorded to those who are working under hazardous or dangerous conditions.

The computation of hazard pay varies depending on the employer, business, and type of work. In general, though, it is given in addition to the regular salary, and is usually computed based on the number of hours a particular worker is working under dangerous or distressing conditions. Some, like U.S. servicemen, do have a fixed hazard pay included in their salaries.

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Who gets hazard pay?

The policy regarding hazard pay varies across businesses and America. But there are more or less accepted standards as to what conditions can be considered as dangerous and distressing, and who will qualify. Here are some examples of employees/workers who get hazard pay.

Servicemen in high-risk duties

Being a soldier involves great risk and danger, and as such, already hazardous. Some, however, are in more hazardous conditions and more exposed to danger than others. For this reason, they are given “hazardous incentive pay.” This is on top of the regular pay and incentive they receive as members of the armed forces.

Those working under extreme weather/environmental conditions

Those who are working in places with dangerous or extreme weather, and are exposed to these conditions. Either too cold or too hot. Examples of workers employed in some places with extreme weather conditions are those working in the oilfields and deserts, as well as those who are working in avalanche-prone areas.

Workers in select industries

Those who are working in industries that have conditions considered dangerous and distressing. Among such industries are mining, construction, some types of agricultural work, and those who are handling hazardous wastes and materials.

Healthcare workers

Those who are working in the healthcare services, whose job and activities constantly expose them to various chemicals and harmful elements that are considered hazardous to one’s health. Included among these are doctors, nurses, caregivers, and some janitorial and maintenance services.

Other types of distressing work

Others may include duties that may not be that dangerous to personal safety, but equally hazardous and distressing to one’s health, either in the short-term or in the long run. Among these types of work are those working in the graveyard shift, and other related activities. Hazard pay for those employees is oftentimes discretionary or computed with other compensation, like overtime pay.

Other types of work, like those in the transportation sector like drivers, pilots, and some utility workers in airlines and shipping lines may also qualify. Others who work in select services, like those in maintenance and janitorial services, do get hazard pay.

We must note that the hazard pay always differs, depending on the exposure, the industry, the personnel, and the type of work or duty being performed. Those industries mentioned above, however, are typical of the ones who give hazard pay, and those working in those industries and under the conditions mentioned, are the ones who usually are entitled and are getting hazard pay.

Hazard pay for essential workers in the U.S.

With the Covid-19 pandemic raging across the country since 2020, there is a considerable halt in the economic sector as well as stoppage of work in most industries. Some workers, however, were considered to be of vital importance due to their role in the delivery of basic goods and services to the populace in this time of the pandemic. They came to be known as “essential workers.”

Since they are working despite the ever-present threat of covid-19, these employees were also deemed qualified for hazard pay. The workers include store workers and utility, some healthcare workers, like lab technicians and other healthcare personnel who might be exposed to the virus by being in a hospital or healthcare institutions.

Included also are law enforcement agents, some security personnel, those working in the postal services, either as staff or couriers. Those who are working as utility and staff in various companies, offices, and institutions that remain in operation, and vital to the campaign against Covid-19, are also considered essential workers qualified for hazard pay.

The personnel mentioned are those that are relevant for the continuing operations of companies, industries, and institutions that are vital for the survival of communities severely affected by the pandemic. Some are also vital in efforts to curb the pandemic, and some are effective in regulating and managing order during this time of economic dislocation and disruption due to pandemic.  

Employers should create a hazard pay policy

There is no single, national policy with regards to hazard pay. Federal agencies do offer some. Most employers, however, do not have a uniform, and some not even a clear policy, with regards to hazard pay. The statutes and laws of different states are either ambiguous with regards to the issue, and some do not even have laws about it.

It is important, therefore, that the concerned parties in a corporation or company must work together in having a clear, definitive policy about hazard pay. The welfare, security, and safety of employees and workers must be assured by the employers to have a more productive workforce, and ensure a healthy working environment, and good relationship with the workers.

Employers should create a hazard pay policy. In case the employers do not have one, employee organizations or unions must seek the cooperation of the employer in working for one. Most of the hazard pay policies in most companies are won and instituted due to close cooperation between the two. Those policies are in collective bargaining agreements.

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Hazard pay, unlike other employment benefits and compensation, is not cast in stone as far as the laws of the country are concerned. Though most sectors do have a policy about it, there is no uniformity with regards to the qualification as well as the computation, and even application, of the rules about hazard pay.

It is now high time that people, both in the private and public sector, must work to have a definitive policy regarding the matter. Laws must be passed for application and regularity of hazard pay. Employees and employers must also work to have a good policy about hazard pay in their company, and implement it accordingly.

Hazard Pay for Essential Worker

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About the author

Susanne Ricee

Susanne Ricee is the Diversity and Inclusion Specialist and Researcher at Diversity for Social Impact. Sue brings over 15 years of HR and Diversity, Equity, Inclusion consultation experience.
Sue's previous experience includes Microsoft, Target, and Kraft. Sue is also the manager of Diversity Leadership Directory