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How to calculate hazard pay?

By - Mar. 13, 2023

To calculate hazard pay you should multiply the percentage rate authorized for the exposure by the employee's hourly rate of pay. That amount is then multiplied by the number of hazardous duty hours to be paid. Overall, hazardous duty pay may not be more than 25% of the employee's rate of basic pay.

Hazard differential pay is computed based on hours in pay status. Any amount of actual exposure during a calendar day entitles the employee to hazard pay for all compensable hours that day.

For example, if an employee performs a hazardous duty for one hour and then takes annual leave for the seven hours remaining in his or her workday, the employee is paid hazardous duty pay for the entire workday.

Hazardous duty pay may not be paid for hours of work for which an employee is paid annual premium pay (e.g., overtime work). An employee may receive hazard differential pay during overtime hours as they are in a pay status during those hours. However, the hazard differential pay is computed on the employee's hourly rate of basic pay, not their hourly overtime rate.

Hazard differential pay shall be discontinued when one or more of the conditions requisite for such payment ceases to exist:

  • Safety precautions have reduced the element of hazard to a less than significant level of risk, consistent with generally accepted standards that may be applicable, such as those published by the Occupational Safety and Health Administration, Department of Labor

  • Protective or mechanical devices have adequately alleviated physical discomfort or distress

How to calculate hazard pay?
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