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As this blog recently noted, the issue of “hazard pay” is drawing increasing attention. Originally confined to the west coast, proposed legislation around hazard pay has now spread to additional jurisdictions such as Illinois and Massachusetts.
In some cases, these bills call for a minimum wage as high as $20 an hour. What they lack, though, is any suggestion on how to pay such a wage, even in industries with very thin profit margins. As seen in California and Seattle, unfunded hazard pay mandates have already caused businesses to close. While it’s understandable that politicians want to appear responsive to the dangers of the Coronavirus, at a time when more than 18 million people are collecting unemployment benefits it makes little sense to pursue policies that will add even more people to the rolls.
Even some worker advocates have recognized that unfunded hazard pay mandates may hurt workers. For example, a representative of the United Farmworkers was quoted in the LA Times as saying that while hazard pay “‘sounds good in theory, it’s possible that ‘the worker ends up losing.’”
Last year, Congress recognized the potential problem with hazard pay mandates. In fact, unlike state and local governments, the House included reimbursements for businesses that provided hazard pay under the proposed HEROES Act.
Hazard pay has already led to litigation, although it remains to be seen how these cases play out. It would be better if state and local government recognized that unfunded mandates have consequences.