Amidst the setbacks and risks created by COVID-19, businesses are being forced to adapt to increasingly uncertain circumstances. From worksite closures and lawfully mandated quarantines to new operational requirements like social distancing and heightened sanitation efforts, the challenges can feel endless.
For hourly workforce employers of essential businesses, it has never been more crucial to adapt and protect your operation- especially when it comes to supporting your employees with fair pay. Given the relief from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, many workers are making less than they would be if they were receiving unemployment benefits.
Hardship pay offers a fair compensation for employees risking their health by continuing to come to work in the face global pandemic. Let’s take a closer look at implementing a hardship pay policy, as well as how to determine the parameters for executing this additional pay benefit effectively.
Why Hardship Pay is Necessary
Going to work can prove disastrous in the face of a pandemic, especially for ‘high-risk’ employees. The inability to maintain social distancing properly at a worksite, for example, can become hazardous or fatal. That is why a hazard or “hardship” stipend can help ease your workforce through this temporary, stressful period. Furthermore, it encourages employee loyalty and retention in the face of heightened risk!
The Code of Federal Regulation suggests this kind of pay for employees entering areas of “known exposure to serious disease for which adequate protection cannot be provided.” While the federal government continues to negotiate new legislation on this issue, some states and localities have already proposed their own hazard or hardship pay statewide.
Creating Your Own Hardship Pay Policy
Providing additional financial support to your workers is a vital move for your business during these trying times. In crafting a hardship pay policy, you will need to determine the following:
- Eligibility criteria for which employees can receive hardship pay. This may include your entire workforce, just those continuing to come into work, or those who are operating near other people at client sites, production lines, or other plants/facilities.
- The length of time during which hazard pay will be provided. This may be an ongoing conversation, as there is no current end date to COVID-19. That said, data from the occupational employment statistics program suggests planning for a minimum time frame of 11 weeks or a maximum of 29 weeks. Federal packages addressing this issue, on the other hand, look to run financial aid through the end of the year, totaling 49 weeks.
- How much pay will be provided to your workers. Typically, hardship or hazard pay is given at a set percentage of hourly pay or at a flat rate. The latest discussions suggest between a 25 percent and 50 percent increase to employees’ pay, depending on their wages. For more clarity, check out these reference charts to see the long-term costs of choosing a flat rate path instead.
- The best way to alert your employees to these changes and distribute pay efficiently. This greatly depends on your workforce management and payroll software. However, processing hardship pay as part of your employees’ fixed pay rates or supplying additional bonuses at the end of each pay period are effective methods for allocation.
Easy Pay Changes with EPAY Systems
Increased administrative burden and payroll complications are the last things you and your team need during a global pandemic. With EPAY’s full-service payroll and tax management solutions, you can manage hardship pay and other necessary payroll and tax administration needs in a seamless and stress-free process.
With centralized processing and powerful customization features, our software can help you implement payroll adjustments in real time, as-needed bonuses and complex pay rules, and so much more. There are no limits on the number of earnings, pay rates or distributions our system can handle. Check out our product overview page for a full list of features, or request a demo today!
