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By: Justin Boron
Last week, the governor made $50 million available to businesses, health care non-profits, public transit agencies, and certain economic development organizations to cover hazard pay for ‘front line’ employees exposed in life-sustaining industries exposed to COVID-19 risks. The payments must go toward paying employees in certain industries, including healthcare, food manufacturing, food retail, childcare, janitorial, transit, and security services.
The hazard pay is a $3/hour raise on the employee’s regular pay rate paid during the ten-week period from August 16, 2020 to October 24, 2020. It also must be used to supplement—rather than supplant—any eligible overtime, benefits, existing employer-paid, hazard pay, or any scheduled increases to current compensation. The funding also may be used only to pay direct, full-time and part-time employees earning less than $20/hour, excluding fringe benefits and overtime.
Eligible businesses must apply online with the Department of Community and Economic Development. The amount of funding is limited to $1,200 per full-time equivalent employee for up to 500 employees per location.
Employers relying on this program will need to be careful to assimilate the hazard pay correctly into their pay system to ensure compliance with wage-and-hour regulations. One question left unanswered is whether the adjusted regular rate that includes hazard pay should be used for calculating the overtime rate. It’s likely that additional guidance will be issued, so employers using a hazard pay grant will need to track updates.
If you have questions or would like more information, please contact Justin Boron at [email protected].
FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients. Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments. For more information about the Task Force, click here.
You can also contact your FMG relationship partner or email the team with any questions at [email protected].
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