Bonus pay for essential workers varied widely across states
JEFFERSON CITY, Mo. (AP) — For putting their health on the line during the coronavirus pandemic, prison guards in Missouri got an extra $250 per paycheck. Teachers in Georgia received $1,000 bonuses. And in Vermont, nurses, janitors, retail workers and many others got as much as $2,000.
Over the past year, about one-third of U.S. states have used federal COVID-19 relief aid to reward workers considered essential who dutifully reported to jobs during the pandemic. But who qualified for those bonuses — and how much they received — varied widely, according to an Associated Press review. While some were paid thousands of dollars, others with similar jobs elsewhere received nothing.
As society reopens, momentum to provide pandemic hazard pay appears to be fading — even though the federal government has broadened the ability of state and local governments to provide retroactive pay under a $350 billion aid package enacted by President Joe Biden in March.
So far, only a few states have committed to paying workers extra with money from the American Rescue Plan.
Florida is giving $1,000 bonuses to teachers and first-responders. Minnesota plans to distribute $250 million in bonuses to essential workers, though a special panel won’t determine who qualifies until later this year.
This past week, Hawaii Gov. David Ige vetoed a budget provision to pay teachers $2,200 bonuses. The Democratic governor said lawmakers didn’t have the authority to tell the state Department of Education how to use the federal money.
Some states remain reluctant to enact bonus programs.
An Oregon proposal to use federal pandemic aid to provide bonuses of up to $2,000 for essential workers failed to make it into the budget that took effect July 1, despite a union lobbying campaign that included thousands of emails and hundreds of phone calls to lawmakers. The proposal would have covered workers in numerous fields, including education, health care, public safety and transportation.
“I don’t think anyone was opposed to it,” Melissa Unger, executive director of Service Employees International Union Local 503 said. But “no one prioritized it.”
Although states have until the end of 2024 to decide how to spend the latest federal aid, some advocates worry the realistic window for providing worker bonuses may be closing as more parts of society re-open.
“Unfortunately, the longer you delay doing it, the less it’s going to be on the top of minds of voters and those policymakers,” Molly Kinder, a fellow at the nonprofit Brookings Institution who tracks pandemic hazard pay policies, said.
Premium pay is one of just several options provided to states under Biden’s aid package. States also can use the money to backfill budget holes, help businesses and households affected by the economic downturn, fund certain infrastructure projects and pay for public health programs such as COVID-19 testing and vaccinations.
Illinois lawmakers used the federal money for dozens of initiatives in the budget that took effect July 1 — from $75,000 for a high school mentoring and violence prevention program to $200 million for hospitals. Nothing was earmarked for extra pandemic pay, even though Illinois had paid it in the past.
Democratic Gov. J.B. Pritzker’s administration provided a temporary 12% pay boost last year to nearly 24,000 state workers whose jobs put them at risk of contracting COVID-19. Most of the $62 million cost was covered with federal funds.
“Morale-wise, that was a critical thing for my co-workers and I,” Crosby Smith, a care provider at a state home for the developmentally disabled near Chicago, said. “Because at that time, when COVID hit our facility … we felt kind of abandoned.”
Smith and his fiancee were among numerous staff and residents at the Ludeman Developmental Center who contracted the virus last year. He said the hazard money helped pay down credit cards and avoid further debt when buying clothing and shoes.
Most states that have provided COVID-19 hazard pay used money from the Coronavirus Aid, Relief and Economic Security Act signed by then-President Donald Trump in March 2020. While some states limited payments to particular public employees, others passed out money to a wide range of private-sector workers deemed to be doing important jobs.
Louisiana spent more than $38 million last year providing $250 payments to more than 152,000 “frontline workers” earning less than $50,000 annually, according to state data provided to the AP. Health care workers received the largest share of the money, followed by grocery store workers and law enforcement personnel. But payments also went to gas station workers, child-care providers, janitors, bus drivers and others.
Pennsylvania Gov. Tom Wolf, a Democrat, used $50 million in federal aid for grants to over 600 businesses to provide a temporary $3 hourly boost to employees earning less than $20 an hour. Health care providers got most of the money, followed by the food industry, according to state data provided to the AP. But millions of dollars also went to cleaning companies and private security firms.
By contrast, South Dakota limited hazard pay to state workers and only for the time they were potentially exposed to COVID-19. One therapy assistant got an extra 40 cents, a pharmacist received $1.80 and a maintenance supervisor got $4, according to state data provided to the AP.
In some states, the cost of hazard pay programs far exceeded initial expectations.
Missouri originally budgeted about $24 million in federal aid to provide an extra $250 per two-week paycheck for state employees working in close-contact institutions such as prisons, mental health facilities and veterans nursing homes. The stipend applied to anyone without unscheduled absences at any facility with at least one COVID-19 case — ultimately covering a lot more people for a much longer period than policymakers had anticipated at the onset of the pandemic.
Missouri ended up paying more than $73 million in hazard stipends to more than 18,000 employees, trigging an additional $24 million in fringe costs such as pension payments and federal taxes, according to state data provided to the AP. The payments ended June 30, and the state has no immediate plans to resume them.
“Without a doubt, it was worth it,” Missouri Gov. Mike Parson (R) said. “Some people did some incredible jobs in this state to stay the course and to stay in the line of duty.”
Vermont’s hazard pay program also swelled in cost. Last August, the state allotted $28 million of federal funds to pay up to $2,000 to health care employees who worked during the early stages of the pandemic. It later added $22 million to expand the program to retail and grocery workers, child care providers, janitors, trash collectors and others. When those funds were depleted, the state added $10 million more to cover all eligible applicants.
Employees in Vermont’s retail and grocery industries received nearly a third of the total money, almost matching the amount that went to health care fields, according to data provided to the AP.
Demand was high, in part, because Republican Gov. Phil Scott encouraged hesitant big businesses, such as Walmart, to apply on behalf of their employees, said Mike Pieciak, commissioner of the Vermont Department of Financial Regulation. He said consumer spending spiked around the time the payments were distributed.
“The primary goal was to say thank you to those frontline workers, but it had that nice benefit as well of getting the money into the economy,” Pieciak said.
Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.Sours: https://www.abc27.com/news/health/coronavirus/bonus-pay-for-essential-workers-varied-widely-across-states/
Workers need hazard pay
Photos from top left: Courtney Meadows, Sabrina Hopps, Yvette Beatty, and Matt Milzman
“We are tired,” said Yvette Beatty, a 60-year-old home health worker at an assisted living center in Philadelphia. “We are scared. Our prayers are running out. How much can we pray?”
》Explore theCOVID-19 frontline heroes series: Grocery workers
With “a little, bitty check” from her work at the front line of COVID-19 pandemic caring for elderly and immunocompromised residents, Beatty is currently the sole provider for her family of seven. Recently, two of her children were laid off due to the crisis. “Now I am the head of everything,” she told me. “Our family is saying, ‘Momma, I don’t want you to go out there.’ But this is my job. It isn’t for the money, because what I get paid is never enough. I have been working in this field for 35-some years. I haven’t seen $15 an hour yet. I put my life on the line for $11, $12 an hour, just to survive.”
Like millions of hourly workers across the country, Beatty is risking her life and the health of her family to perform a job now deemed “essential” for society—and is barely surviving herself.
COVID-19 has laid bare the enormous gap between the value that frontline workers like Beatty bring to society and the low wages—and lack of respect—many earn in return. It is long past time that low-wage workers secure a permanent income boost and earn a living wage with adequate benefits.
The extreme sacrifices we are asking frontline workers to take require an immediate response to recognize the risks they are facing simply by showing up to do jobs like ringing up groceries, cleaning hospital rooms, driving buses and ambulances, and treating critically ill patients. We owe them urgent policy change to ensure they earn federally mandated hazard pay, on top of stringent safety measures and life-saving personal protective equipment (PPE) to shield them from the coronavirus.
From doctors to delivery drivers to grocery and gig workers, the pandemic’s new class of essential workers have begun voicing their desire for hazard pay.
“I think some pay increase would be wonderful because I don’t think they understand the toll that comes through in our lives,” said Courtney Meadows, a 37-year-old grocery cashier in Beckley, W.Va. “They don’t see the panic on people’s faces.”
With little financial security, many workers I interviewed feel like they have no choice but to continue working, and the sudden hazards of their jobs were top of mind. Nearly every frontline worker I interviewed said they feared exposing their loved ones to the virus.
Sabrina Hopps, a 46-year-old housekeeping aid in an acute care facility in Washington, D.C., worries constantly about the risks her job poses to her family as she cleans the rooms of vulnerable residents. “I’m petrified, to be honest,” she told me. “If I contract it, I live with my son, my daughter, and my granddaughter. My son and I have asthma. He is also a cancer survivor.”
The low wage Hopps earns for her essential work is the reason she lives with relatives across three generations—and why she cannot afford to safely social distance from them. “They should give us extra compensation because we are the ones taking the risk,” said Hopps. “We are the ones that will be exposed faster than anybody else.”
Fortunately, a growing number of policymakers are championing hazard pay. On April 7, Senate Democrats introduced a proposal calling for the next stimulus bill to include a COVID-19 “Heroes Fund,” through which the federal government would finance “premium pay” of an additional $25,000 (or roughly an additional $13 per hour) for essential frontline workers. The proposal builds on a similar suggestion from Sen. Sherrod Brown (D-Ohio), who wrote to President Trump in March calling for new “Pandemic Premium Pay” worth time-and-a-half wages for essential workers.
A fair and equitable system for hazard pay should compensate essential, frontline workers who face significant exposure to COVID-19 through their jobs. Priority should be given to workers who currently earn low and modest wages.
Access to hazard pay should not be limited to workers in the health field. Early signals from the Trump administration suggest a narrow interest in hazard pay only for health workers such as doctors and nurses. While health professionals face an unquestionably high risk of contracting the coronavirus, they are not alone; just in hospitals, a far greater number of workers—security guards, cafeteria workers, cleaners, front desk staff—risk their lives too and should be recognized and compensated.
Recently, my colleagues Adie Tomer and Joseph W. Kane analyzed workers in industries that the Department of Homeland Security has designated as essential, which include mail carriers, grocery cashiers, pharmacy aides, and package handlers. These workers, too, face many coronavirus risks. Recent headlines about workers dying from on-the-job exposure reinforce the serious danger to those outside the health sector: In New York City alone, a staggering 41 transit workers have died, while across the country, COVID-19 has killed several grocery workers as well.
Determining the appropriate amount of compensation that essential workers should receive for risking their lives is a fraught and challenging exercise. Amber Stevens, a 30-year-old grocery cashier in Washington, D.C., voiced that difficulty.
“Honestly, I don’t think you can put a number on how much is enough, because we are risking ourselves to help others,” Stevens told me. “How can you really put a number on my life, my health?”
Any federally mandated hazard pay should be sufficient to ensure all hourly workers risking their lives earn a living wage of at least $16.14 per hour—but truly, pay should go well beyond this minimum. For workers like Yvette Beatty, who started the pandemic earning very low wages, an increase of only a few dollars an hour (or even time-and-a-half wages) would not be enough to support a family.
Hazard pay compensation should be progressive, to ensure that workers earning less than a living wage (or even less than the country’s median wage of $18.58 per hour) are adequately compensated at a level akin to time-and-a-half or even “double-time” wages. Higher-paid essential workers would receive less as a percent of their (higher) salaries.
To enhance the administrative feasibility of the program and limit total cost, the government could select one standard hazard pay amount for all at-risk frontline workers at a level that sufficiently boosts (by 50% to 100%) lower-wage pay, and limit eligibility up to a maximum income.
The following chart summarizes several benchmarks and levels of hazard pay under consideration, and considers their strengths and weaknesses:
|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.
In his own words: Matt Milzman, Safeway cashier in Washington, D.C., on hazard pay
“No, the $2 per hour is not enough. At the same time, I am grateful to have it over nothing, that is the insane thing. You have people doing the exact same job that I am doing, and no hazard pay. God forbid, doctors, nurses, people wrapping themselves in garbage bags because they don’t have proper PPE—no hazard pay. I mean, it is ridiculous.
No one signs up to do this. Even if you work in one of these emergency jobs, you might, but this is something wholly different. This is something that our society is not equipped to handle in a fair and equitable way. This has laid bare more than anything—everyone is willing to give you just enough to survive, but at the end of the day, when the chips really fall down, then everyone rings their hands about, ‘Oh how are we going to pay for it.’ We can pay for a million other things, but in terms of providing the people who are putting their lives at risk equitable and fair pay, then everyone shrugs their shoulders and says, “Oh gosh, golly gee.’ It is ridiculous.
You know what I think should happen? Honestly, I think it is double pay. Everyone dealing at the front line of this should get double pay. I’ll tell you something, the difference between my normal shift that I worked, Jesus, a month ago, and the shift that I am about to work right now in five minutes, the difference between those two is not $2 an hour. These are insane. I am a grocery store worker. I am not a licensed mental health professional. And yet I am having to deal with people who are in an incredibly agitated state, understandably so. Anxiety. And that weird miasma that kind of exists over everything right now where none of us know what the hell is going to happen because this has never happened before. This surreal moment we live in. I do not have the proper training to deal with this. And yet I am being expected to go in every shift and deal with this. And I’ll happily deal with it. Sure. I would rather it be someone like me than someone who might be at a greater risk of catching and possibly dying of this disease. But it’s not a difference of $2 an hour.
I think there needs to be a fair reflection in the pay people are getting: doctors, nurses, grocery store workers, delivery drivers, everyone at the front of this. Sanitation workers. We need to be making at least double. The fact that some people aren’t even making any hazard pay, it is criminal. It really shows where our priorities are as a society. Profit is the number-one priority in our society. And as the president said, best case scenario, 100,000 people die. That is two of the towns I live in. I live in Rockville, Maryland—that is 50,000 people. Two Rockvilles worth of people dying, that is insane. And that is the best-case scenario. And all of these millionaires and billionaires who run these companies are thinking, how do I maintain my profits?I think there needs to be a fundamental restructuring of how we think and do things in this society that focuses on humanity. The humanity of us in the grocery stores, the humanity of the doctors and nurses in the hospital, the humanity of the people who continue to pick up your trash every day, the humanity of all people in this situation who are going in every day, risking their lives to try and carry on as normal.”
In the face of the extraordinary sacrifices that society is asking of essential workers, it is an outrage that so many workers are risking their lives while being denied the dignity of a family-sustaining wage.
“They are calling a small temporary raise a ‘hero pay,’” said Lisa Harris, a 32-year-old grocery cashier in Richmond, Va., reflecting on the temporary $2 per hour raise her employer, Kroger, has introduced. “I don’t think that is enough, especially for those who started off at minimum wage. And it is only temporary during this crisis. I think that $15 an hour should be the minimum, and stay there. We are heroes every day, and we deserve to be paid as such. We haven’t gone from unskilled labor to essential personnel. We always were essential personnel.”
We owe it to all frontline workers who are risking their lives for the rest of us to adequately compensate, support, recognize, and protect them. Hazard pay is the least we can do to compensate them for the risks they face—a down payment for what should be permanent increases so that all workers earn the dignity of a living wage.
Photos taken by Molly Kinder for Yvette Beatty, Sabrina Hopps and Matt Milzman. Photo of Courtney Meadows taken by Mark Covey.
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In April 2020, I published a report calling on Congress to provide federally funded hazard pay for the country’s 50 million frontline essential workers. One year later, little progress has been made. Despite early political momentum last spring, Congress never passed any dedicated federal funding for hazard pay. The six essential workers profiled in that original report still face risks from COVID-19, but without earning any extra compensation for doing so. In the absence of federal funding, it has been mostly left to the resources and willingness of individual employers to provide hazard pay. Most have not.
Now, however, state and local policymakers have an enormous opportunity to finally provide the hazard pay that essential workers deserve. The $1.9 trillion American Rescue Plan Act signed into law in March includes $350 billion in direct relief to state and local governments, and the finances of these governments have proven more robust than was feared, with a number of states even posting budget surpluses. This provides state and local governments the opportunity to immediately harness a portion of the generous federal funding to provide hazard pay compensation to low- and modest-wage essential workers who have risked the most while earning the least. Promising models already exist, including in Pennsylvania, Vermont, Louisiana, Michigan, Virginia, and New Hampshire.
Here’s why more state and local governments should follow these examples with the new federal funding, and how such programs could work.
Why low-wage essential workers deserve hazard pay—and why federal money should fund it
A year into the COVID-19 pandemic, it is clear that our society and economy could not function without the work of millions of low-wage frontline workers, who have kept us fed, healthy, and protected. While everyone in society has benefited from this risky and essential work, the sacrifices have been disproportionately borne by those with the least and who have little choice but to continue to work on the frontlines. Higher-income workers are six times more likely to be able to work from home than low-wage workers, who have fewer choices for safe employment. Since the benefits of essential work are shared across society but the risks are concentrated, publicly funded compensation is warranted to compensate those who have sacrificed the most.
Public funding is also necessary to address federal and state policy failures that have exacerbated this inequity. The federal minimum wage has been stuck at just $7.25 an hour since 2009. While 29 states and Washington, D.C. have set higher minimum wages, 21 states have not.
These low minimum wages disproportionately impact essential workers. Using 2018 data and essential worker classifications from my colleagues Adie Tomer and Joseph W. Kane, Laura Stateler and I found that about half (or 22 million) of workers in occupations with a median wage of less than $15 per hour were essential workers. Nonwhite workers are overrepresented among these low-paid, risky jobs at the COVID-19 frontline. The clearest way for the federal government to permanently raise pay for essential workers is to raise the federal minimum wage to $15 per hour. In the meantime, hazard pay is a stopgap measure to ensure frontline workers earn a living wage while shouldering extreme burdens.
Across dozens of interviews with frontline essential workers over the course of the pandemic, no issue was raised more often than their desire to receive hazard pay. While other policies such as relief checks and tax credits can boost income for essential workers, hazard pay uniquely addresses workers’ desire for compensation for the dangers they face during each shift. Hazard pay is also very popular with the public: A poll last spring found that more than three-quarters of respondents favored employers providing hazard pay to essential workers. A University of California, Berkeley poll from January found that 77% of Californians support legislation requiring employers to provide hazard pay to frontline essential workers until they are vaccinated.
Innovative models from state and local governments
Early in the pandemic, Democratic leaders in Congress embraced the concept of “hero pay” for the country’s essential workers. In May 2020, a $190 billion “Heroes Fund” became the signature component of House Democrats’ $3 trillion HEROES Act, which proposed generous compensation to essential workers across the public and private sectors. Despite this early political momentum, Congress never passed any specific hazard pay funding into law. The “Heroes Fund” legislation languished in the Republican-controlled Senate, and by September, Democrats dropped it.
Fortunately, several innovative hazard pay initiatives led by state and local governments have helped fill the void. Taking advantage of federal funding through the 2020 CARES Act and the Coronavirus Relief Fund, a handful of states introduced creative hazard pay programs that temporarily boosted pay for frontline essential workers. Three states—Pennsylvania, Vermont, and Louisiana—each used $50 million of federal funding to create hazard pay programs for a wide range of essential workers from the private, public, and nonprofit sectors. Pennsylvania and Vermont’s programs, in particular, offer useful models for states seeking to provide hazard pay with new federal relief.
Pennsylvania: The COVID-19 PA Hazard Pay Grant Program was a reimbursement-based grant program funded through $50 million in federal CARES Act money. In summer 2020, employers applied for grants to reimburse hazard pay of up to $3 per hour for work performed between August and October, and up to $1,200 total per employee. Eligibility was limited to six key industries, covering both private and nonprofit employers: health care and social assistance, food manufacturing, food retail, transit, security services, and janitorial. More than half of the money went to employers in the health care and care sectors, including home health agencies and care homes, where wages are very low. Apart from 7-Eleven in one county, Pennsylvania’s funding did not go to large Fortune 500 companies. The program had a very strong equity focus, prioritizing workers who are low-paid (earning up to $20 per hour), at high COVID-19 risk, and with the least means to access hazard pay. The $50 million program was very popular, and ultimately could only support 10% of eligible applicants.
Vermont: Funded by federal CARES Act money through the Coronavirus Relief Fund, the Vermont Frontline Employees Hazard Pay Grant Program was administered in two rounds. Employers applied for grants to retroactively cover a lump sum of $1,200 to $2,000 per eligible frontline worker who worked in the spring of 2020. Eligibility was broad across the private and nonprofit sectors to workers at “elevated risk” of COVID-19, including in health care, assisted living and home care, first responder service, janitorial service, food service, trash collection, child care, social programs, security service, and grocery, retail, and pharmacy. The program had an equity focus, with eligibility limited to workers earning up to $25 per hour. Grants were administered on a first-come, first-served basis. Out of hundreds of employers selected for funding, several large, profitable retail chains applied at the encouragement of state officials and the governor, and received funding. They include several of the top retail companies that have earned windfall pandemic profits, including Dollar General, CVS, Home Depot, Target, Lowe’s, Walmart, and a subsidiary of Albertsons.
The scale of these statewide programs was relatively modest, while the demand was high.
“It wasn’t by accident that it was oversubscribed immediately,” Pennsylvania Governor Tom Wolf said at a recent Brookings event. “Nine-hundred million dollars was requested…18 times what we actually had available. Fifty million dollars for Pennsylvania was a lot of money, but it was not close to being enough.”
Several other states—including Virginia, New Hampshire, and Michigan—used CARES Act dollars to support temporary pay bumps for more specific groups of frontline workers, such as first responders, public sector workers, corrections staff, and care workers.
Hazard pay programs have expanded on the local level, but eligibility is narrow
Dozens of other county, city, and state governments have implemented a patchwork of hazard pay programs for specific groups of workers at different times, but without the scale of the statewide programs.
Recently, city and county governments across California and Washington passed mandates requiring large, profitable grocery, retail, and drugstore chains to provide temporary hazard pay to essential workers. The localities include Seattle, Los Angeles, Los Angeles County, San Francisco, Long Beach, Oakland, San Jose, Santa Monica, Santa Ana, Berkeley, Coachella, Irvine, and others.
The main limitation of local mandates is their narrow eligibility. To expand hazard pay to a broader swath of essential workers, local governments should consider harnessing federal relief money to reimburse other employers that have not seen large profits during the pandemic.
Design principles for state and local hazard pay programs
State and local governments can now take the lead in implementing new hazard pay programs by leveraging the tremendous flexibility of the American Rescue Plan’s $350 billion in state and local aid. In addition, strong support from the Biden administration and clear guidance from the Treasury Department would help build momentum and scale the best initiatives to date.
The following are four design principles that local, state, and federal leaders can consider, building on promising aspects of the Pennsylvania and Vermont models.
- Federally guided, state- and local-led, and employer-provided. While state and local governments will lead on design and implementation, the Treasury Department can issue guidance and outline key principles to guide the use of state and local aid for hazard pay programs, similar to the guidance detailed in the use of Coronavirus Relief Fund money (which was considerably less flexible than this round of state and local aid). The Treasury guidance could include key tenets around eligibility and scope, with some specifics left to state and local governments to determine based on local need, conditions, and priorities. For administrative feasibility, state and local governments should consider reimbursing employers to provide hazard pay; with the exception of Louisiana, most state and local hazard pay programs have been administered through employers.
- Retroactive. Ideally, the Treasury Department will issue clear guidance that allows state and local governments to provide retroactive hazard pay for work performed in the months before the American Rescue Plan Act was enacted, including the deadly winter period when few frontline workers were vaccinated. Most existing state hazard pay programs provided retroactive pay. If Treasury deems retroactive pay prior to the law’s enactment ineligible, state and local governments should provide hazard pay for work performed since March 2021.
- Equity-oriented. Hazard pay programs should have a strong equity focus and prioritize workers who earn low and modest wages, especially those who earn less than $15 per hour. Pennsylvania’s program limited eligibility to essential workers earning under $20 per hour, while Vermont’s program was limited to workers earning less than $25 per hour. State and local governments could consider progressive funding, with the largest hourly amounts (for instance, $3 to $5) allocated to workers earning less than $15 per hour, and a smaller hourly amount (such as $2 per hour) for workers earning between $15 and $25 per hour, or some other threshold that is appropriate for local cost of living.
- Broad eligibility—with exceptions for large, profitable companies. State and local governments should include a broad swath of frontline essential workers for hazard pay eligibility. Some basic eligibility principles include workers in industries the Department of Homeland Security deems “critical infrastructure”; workers who must physically show up to work; and workers who face elevated risks of COVID-19 infection. One possible exception to eligibility is employees at very large, profitable companies. Many of the country’s largest retail chains have earned windfall profits during the pandemic, and with few exceptions, most have not meaningfully shared those profits with workers through sustained hazard pay (with many spending hundreds of millions of dollars or more on stock buybacks instead). Those companies should provide hazard pay out of their own resources, while public funding is prioritized to support smaller employers and companies that have not earned large pandemic profits. Policymakers could explicitly restrict funding to large, profitable companies, or simply discourage them from applying, which may be a sufficient disincentive (large retail companies such as Walmart and Home Depot were initially reluctant to apply for hazard pay funding in Vermont for fear of a public backlash, until state officials encouraged them to do so). Policymakers can either use their bully pulpit to encourage large, profitable companies to provide hazard pay or they can pass mandates—such as those on the West Coast for grocery stores—to compel them to do so.
A clear opportunity for action is finally here
The COVID-19 pandemic has not ended for the country’s 50 million frontline essential workers, even if the public displays of gratitude and most voluntary hazard pay programs have. We cannot forget their sacrifices, nor overlook the underlying inequities and inadequate pay that remain.
There are essential workers in every community across America who have kept their neighbors fed, protected, and healthy over the past year. They deserve far more than our praise. State and local leaders should leverage the American Rescue Plan’s historic infusion of federal relief to provide them the compensation they deserve for the risks they face during the pandemic—a down payment on what should be a permanent living wage.
Get daily updates from BrookingsSours: https://www.brookings.edu/blog/the-avenue/2021/04/06/with-federal-aid-on-the-way-its-time-for-state-and-local-governments-to-boost-pay-for-frontline-essential-workers/
Oregon's essential workers could get one-time hazard pay up to $2,000 under new legislation
Essential workers in Oregon may receive up to $2,000 in a one-time payment from the state for working through the pandemic if new legislation is approved by lawmakers this session.
House Bill 3409, introduced Monday, would direct the Department of Consumer and Business Services to create a program for an up-to $2,000 in retention incentive for essential workers who stayed on through the pandemic last year. The program also would give a $1,200 return-to-work incentive for essential workers hired after the bill's passage.
It would essentially be one-time hazard pay with American Rescue Plan funds for those who faced the most risk of contracting COVID-19 through their public-facing jobs during the ongoing pandemic, something local worker's unions have been lobbying for.
"Essential workers are the backbone of our economy and have carried us through COVID-19 and wildfires, risking their lives and well-being to ensure we have food on the table, adequate care and support," said Rep. Rachel Prusak, D-Tualatin, one of the chief sponsors of the bill. "With this bill, we're hoping to give our essential workers one-time payments that will help to provide adequate compensation, as well as honor the work that they've done.
"It will also support small businesses who are struggling to hire workers by providing financial support for one-time hiring bonuses," she said.
Other states also have set aside federal relief funds for essential worker premiums or hazard pay, such as Michigan, Pennsylvania, Louisiana and Vermont.
More:Employers need workers. Workers need jobs. What's the problem?
Melissa Unger, executive director of SEIU 503, said the union has been lobbying for this payment program since the American Rescue Plan came out in March. SEIU Local 503 represents thousands of workers, including classified staff at public universities like the University of Oregon and care home workers.
The union originally tried to get the pay program wrapped into the overall state budget, but decided to move forward with a bill a few weeks ago, she said.
"I think this is a really important part of coming out of COVID-19 and respecting the work that's been done to keep so many people safe," Unger said. "That's an opportunity for the Legislature to say ... thank you to the thousands and thousands of Oregonians who kept us safe, masked up and did their jobs."
The Oregonian/OregonLive was first to report the story last week, before the bill's first reading on Monday. The bill includes a long list of which industries and type of jobs would qualify, including those in health care and public health, education, food and agriculture, public works, transportation, residential and shelter facilities and commercial facilities.
It specifies that eligible workers need to have had regular physical contact within 6 feet with an individual other than someone in their household for work, or worked in cleaning or sanitizing areas open to the public or used by people known to have tested positive for or suspected to have COVID-19, such as hospitals or other quarantine space.
The bill outlines how those who are unemployed or were unemployed within a specific period of time could qualify for the one-time payment of a $1,200 return-to-work incentive for these eligible jobs.
On the other hand, workers who were in these jobs for at least 520 hours between March 8, 2020, and March 8, 2021, would be eligible for the retention pay. This breaks down to 13 weeks for those who work a typical full-time schedule of 40 hours a week.
Workers would either get $1,000 or $2,000 depending on how much they made in wages.
Workers who earned the lowest wages also would be eligible for the most money, Prusak said. If someone earned less than the 2019 state average wage — $55,000 — they would receive $2,000. If they received more than that but up to 150% of the average wage — about $82,500 — the worker would receive $1,000. The bill caps the payouts at that 150% annual wage rate.
Priority of applications will be given to those whose jobs put them at higher risk last year. An eligible worker's immigration status would not be considered when determining eligibility for the payment.
More:Lane County lawmakers lay out spending of federal COVID-19 rescue plan funds
The biggest hurdle supporters of the bill see is the actual amount of money requested.
Lawmakers are estimating about 150,000 essential workers would be eligible and are asking for $450 million of the $2.6 billion the state received in American Rescue Plan pandemic relief funds for this program.
However, Oregon has already set aside some relief funds for other uses, Prusak said.
"I don't think we'll get the full $450 million," she said. "I'm hoping that we're able to see how much money is left with all that we're spending and utilize that, but I do think it should be in the $250 million ballpark so that we make sure that it actually gets to the workers that need it."
Oregon's unemployment level dropped below 6% in April for the first time since the pandemic began and stayed at that figure of 5.9% in May, according to Oregon's Employment Department on Tuesday.
More:Oregon unemployment rate drops to pre-pandemic levels
However, businesses and workers still are recovering from thousands of lost jobs during the pandemic. Supporters of this bill also hope the return-to-work incentive will help shore up this gap in some of these frontline jobs.
"A piece of this is also just to acknowledge the turmoil and fear that front-line workers went through every day," Unger said. "Every day they felt like they were putting their own health and their own family's health at risk to go to work and keep their job, and keep their community safe … that takes a toll, and we have not acknowledged that toll.
"Often you'll find that people who did that are in lower wage jobs," she said. "The high-wage jobs and white-collar jobs correlate with who got to stay home during this pandemic."
The bill has some bipartisan support, with three of the 22 co-sponsors being Republican lawmakers.
However, Dru Draper, communications director for Senate Republicans, told The Oregonian their caucus would oppose the bill due to $300 weekly unemployment benefits not being addressed in it.
Contact reporter Jordyn Brown at [email protected] or 541-246-4264, and follow her on Twitter @thejordynbrown and Instagram @registerguard. Support local journalism, subscribe to The Register-Guard.
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Pay stimulus hazard
Oregon lawmakers won’t pay ‘essential worker’ stimulus this year
Oregon Democrats said Monday they won’t fund an additional stimulus bill for the state’s essential workers this session. They pledged to revive the idea during the Legislature’s short session in 2022, but it’s not clear there will be a ready funding source for the proposal next year.
Last week, 23 legislative Democrats signed on to co-sponsor House Bill 3409, which would have dedicated $450 million from Oregon’s share of federal stimulus money to pay bonuses and a back-to-work incentive to thousands of frontline workers.
Those workers could have received up to $2,000 in stimulus money if they worked through the pandemic, or $1,200 if they returned to work after collecting unemployment during the pandemic.
More:Oregon's essential workers could get one-time hazard pay up to $2,000 under new legislation
But with lawmakers racing to finish their regular legislative session this week, the Democrats who control the body say they will defer the idea until next year.
“Essential workers have been risking their lives every day during the pandemic. We must continue to put working families first as we recover from this public health and economic crisis in the short term — and as we rebuild our economy in the long-term,” House Speaker Tina Kotek said in a statement Monday. “That’s why my top priority for the remainder of Oregon’s share of federal American Rescue Plan dollars will be additional support for frontline workers in 2022.”
Oregon received $2.6 billion in state government funding from the $1.9 trillion federal stimulus bill Congress approved in March. Kotek’s office didn’t say how much federal stimulus money lawmakers expect still will be available when they return to Salem next year.
More:Undocumented and uninsured: How Oregon could address racial inequities in health care
State labor leaders pushed hard for the additional stimulus payments this month, arguing that frontline workers deserved a reward for staying on the job despite the risk of infection from COVID-19. And some Democratic lawmakers argued that a back-to-work incentive would help combat the labor shortage facing Oregon employers.
Legislative Republicans had opposed the payments, arguing that it made no sense to pay more stimulus money while unemployed workers were receiving a $300 weekly bonus in federal compensation. They complained that bonus was keeping some prospective hires out of the workforce, and that Gov. Kate Brown hadn’t done enough to reopen schools and make it easier for parents to return to their jobs.
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