COVID-19 Hazard Pay Grant

The Pennsylvania Department of Community and Economic Development recently announced the availability of grants that will provide hazard pay for certain eligible employees.  According to the Program Guidelines’ Statement of Purpose, “hazard pay is intended to keep front-line employees working in sectors that are vital to every Pennsylvanian’s existence.”  The program will help employers provide hazard pay to retain current employees.  “This reimbursement-grant is limited to employers who will be offering hazard pay over the eligible program period.” 

Eligible employers include 501(c)(3) non-profit organizations that provide healthcare services.  “Hazard pay” is defined as “additional pay for performing hazard duty or work involving physical hardship, in each case that is related to COVID-19.”  Grant funds may be used to provide hazard pay for both full-time and part-time employees earning less than $20 per hour.  The $20 per hour threshold does not include fringe benefits and overtime payments.  The period in which these payments may be made is the 10-week timeframe from August 16, 2020 through October 24, 2020.  Eligible employees are “frontline” employees facing the hazards of COVID-19.  The grant program ranks applicants according to their employees’ risk of exposure to COVID-19.

Employers may apply for up to $1,200 per eligible full-time equivalent (FTE) employee.  The funds must be paid out over the 10-week timeframe as a $3 per hour increase to an employee’s regular base rate.  The hazard pay is only applicable to an employee’s first 40 hours worked per week. The hazard pay will also be included in the calculation of an employee’s base rate of pay for overtime purposes.  Employers may not use the funds as a substitute for an employee’s regular pay.  For example, if an employee is making $15 per hour prior to the receipt of the grant, an employer cannot reduce its portion of the employee’s hourly compensation to $12 per hour and supplement it with the $3 per hour grant funds.  An employer may apply for a grant to provide hazard pay for up to 500 eligible FTE employees per location.  No employer may receive more than $3 million in total funding under this program. 

While general information is available, FAQs have not been issued. Additional guidance may be released in the future as details become available. 

As always, please do not hesitate to contact us with any questions.