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Policymakers consider hazard pay that matches the job of essential workers

As millions of American “essential” workers during the COVID-19 pandemic continue to ensure the rest of society has access to things like food, mail and health care, policymakers are proposing different types of hazard pay that are commensurate with the health risks these workers face.

The Washington D.C.-based think tank Bookings Institution compiled the below chart of hazard pay options currently under consideration.

“A fair and equitable system for hazard pay should compensate essential, frontline workers who face significant exposure to COVID-19 through their jobs,” Brookings writes, with a priority on low- and modest-wage earners and not limited to health care workers.

Proposals include boosting essential workers’ hourly pay by 25 to 100 percent, increasing hourly pay by $2 combined with small bonuses, or providing checks of $25,000 (an extra $13 per hour) for work done through the end of 2020.

Hazard pay amount

Examples and benchmarks

Pros and cons

25% increase

The federal government. The Office of Personnel Management issued

new coronavirus guidance to federal agencies in March advising that individual agencies are to determine whether federal employees qualify for 25% hazard pay on a “case-by-case basis.” The 25% hazard pay differential is stipulated in the Code of Regulations for federal employees exposed to “virulent biologicals,” meaning “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.”

A 25% pay increase may be more appropriate for salaried employees who earn more than median wage than it is for low-wage workers.

For instance, a 25% increase for a low-wage worker earning $11 per hour results in a wage of only $13.75 per hour.

50% increase, or “time-and-a-half” pay

Holiday pay. In hourly wage work, from grocery stores to retail shops, it is a common practice for many employers to provide “time-and-a-half” pay for hourly employees working holidays or Sundays.

Overtime. While overtime varies by company, typically employers pay overtime worked by hourly workers at “time-and-a-half.” In California, this is mandated for every hour worked over eight hours, up to 12 hours.

Pandemic Premium Pay” proposal. Sen. Sherrod Brown (D-Ohio) has called for the next stimulus bill to require all companies to provide

“time-and-a-half” hazard pay—or “

Pandemic Premium Pay”—to essential workers, retroactive to the beginning of the pandemic and extending throughout it.

“Time-and-a-half” has the benefit of being widely recognized by hourly workers. However, it is not generous enough for the lowest-paid workers to earn a living wage, and would be very generous for higher-paid workers.

Time-and-a-half would just barely put the typical grocery cashier over the minimum living wage.

100% increase, or “double-time pay”

Extra overtime. Double-time pay is mandated in California for certain extra overtime worked, above and beyond 12 hours.

Workers’ groups. Some

workers’ groups have called for “premium” hazard pay of double-time pay.

Double-time pay would result in nearly all low-wage workers earning at least a living wage.

But, double-time pay is costly for workers making above the median wage.

Extra $13 per hour, or $25,000

“Heroes Fund” proposal. In their proposal for a COVID-19 “Heroes Fund,” Senate Democrats have suggested essential workers receive an additional $25,000 for work through the end of 2020, equivalent to an extra $13 per hour.

The Heroes Fund proposal is simple, with one standard amount.

The increase would be close to double-time pay for the average low-wage worker, a 50% boost for a mail carrier, a 20% boost for a pharmacist, and less than 15% for a surgeon (based on median 2018 wages).

Smaller, one-time bonuses and $2 per hour increases

Large companies. A handful of large companies including

Amazon

Safeway

Kroger

Target

Whole Foods, and 

Costco are instituting a temporary pay increase of $2 per hour. Several other companies such as

Walmart

Walgreens, and 

CVS have offered one-time bonuses ranging from $150 to $500.

City and state governments. Atlanta is paying essential city employees

an additional $500 per month, while in Georgia’s Augusta County, essential employees will receive an

additional $5 per hour. Maryland state employees will receive an additional

$3.13 per hour (or about $250 every two weeks).

A small hourly bonus is not enough to raise the pay of many low-wage workers to a living wage. A typical Kroger cashier makes about $10 per hour. An additional $2 is still well short of a wage that provides for a family’s basic needs.

Several workers, such as Matt Milzman (text box below), have expressed their frustration that the hourly pay increases offered by their employers are insufficient.

Emery Reddy helps workers. Call us if you have an L&I, workers’ comp, injury, or other employment law claim. You won’t get better advice.

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