The severity of infection and high incidence of COVID-19 transmission arguably qualify certain physicians for hazard pay during this epidemic. The US Department of Labor defines hazard pay as:
Additional pay for performing hazardous duty or work involving physical hardship. Work duty that causes extreme physical discomfort and distress which is not adequately alleviated by protective devices is deemed to impose a physical hardship.
Within a few weeks of the US emergence of COVID-19, government officials were advocating hazard pay for physicians and other healthcare workers. The House of Representatives passed the HEROES Act on May 15, 2020, approving $200 billion for physicians, nurses, first responders, and grocery, postal, and transit workers. The bill laid out a $13 per hour raise up to $25,000 in additional pay through Dec. 31 for workers earning up to $200,000, and $5,000 in additional pay for those earning more than $200,000. A $15,000 signing bonus to those who agree to take on such a risk was also included. The legislation has not been passed in the Senate.
Without federal oversight, some health systems have taken the cause upon their own shoulders.
In April, Wisconsin’s Advocate Aurora Health announced a “special pay” program of an undisclosed dollar amount across its 15 hospitals and 32,000 employees. The special COVID-19 pay was made available to team members serving in dedicated COVID-19 units, emergency departments, or units that have a COVID-19 patient population of 50 percent or greater. The special pay was effective for April and May and evaluated monthly thereafter.
New York-Presbyterian/Columbia Hospital provided a bonus of $1,250 for everyone working on the front lines of COVID-19 care for at least one week.
New York City’s largest hospital network, Northwell Health, enacted a “recognition program” that awarded up to a $2,500 bonus payment and 1 week of paid leave to 45,000 workers.
While some healthcare systems support it, others question whether hazard pay for physicians is appropriate given the inherent risks already assumed by medical professionals. It is important to note that the American Medical Association has not presented an opinion on either side but has supported hazard pay for residents. For those wanting to pay a premium rate or bonus to physicians for hazardous work conditions, the government has made it easier with the COVID-19 blanket waiver of the Stark Law, effective March 1, 2020.
In addition to meeting the blanket waiver requirements, health systems may also consider the following when establishing hazard pay for their employed physicians:
In many industries, premium pay for employees ranges from 5% to 15% of base pay. For federal workers covered by hazard pay, the pay differential is typically 25%.
Recent federal proposals for supplemental hazard pay have included a flat rate of $13 per hour (HEROES Act), a flat rate of $18.50 per hour, and a sliding rate of up to $12 per hour.
For higher-income employees, flat dollar amounts, as opposed to percentage of pay increases, may help ensure reasonableness.
If you would like valuation assistance related to hazard pay for your employed physicians, please contact Darcy Devine at email@example.com.