Hazard pay for high-risk jobs: what is it and how to manage it?

Hazard pay in High Risk Jobs

Modern work is increasingly going digital – and companies have been adjusting rather well, with Work From Home allowances, work set-up benefits, health insurance that covers eye protection from screens, and even gym memberships to make up for the sedentary lifestyle dictated by the new work lifestyle.  

But how about other workers? Those whose jobs cannot be done in the safety of an office, and which involve a considerable amount of risk? How do employers address their hazardous working conditions? What do those tailored benefits and incentives look like?

While there are no holistic solutions that apply to all situations, a good starting point is hazard pay.

What is hazard pay?

Hazard pay is a monetary benefit paid to employees who perform physically demanding work or who go on on dangerous assignments.

A physical hardship implies a work responsibility which can result in extreme bodily discomfort that cannot be sufficiently relieved by protective measures.

Who is eligible for hazard pay?

Hazard pay is typically reserved for those who do physical labor or face high-risk situations while on duty. But the COVID-19 pandemic has made it so that frontline workers are also included in the category of workers eligible to hazard pay. Here are the categories of workers who are eligible to hazard pay, by definition:

  • Those who work in hostile environments
  • Those working in severe weather conditions
  • Those working in medical facilities
  • Those working in war zones

 Other fields where hazard pay is common include:

  • Industry-wide fishing
  • Aviation
  • Construction 
  • Exterior landscaping
  • Farming and agriculture

Is hazard pay mandatory in Africa?

African countries each have their own legislative approach to hazard pay. In some countries, it is mandatory for employers to include hazard pay in their employees’ wages when the latter’s working conditions and responsibilities meet certain criteria.

This holds true in South Africa for example. A law passed in 2022 stipulates that eligible employees should receive a Special or Standard Danger Allowance. This allowance applies to:

  1. Traffic/Regulatory Inspectors;
  2. Center-based Correctional Officers guarding prisoners;
  3. Social Workers, Social Auxiliary Workers, Youth Workers, Probation Workers, Nursing Personnel, Occupational Therapists, Psychologists and Vocational Counsellors and Health Related Workers, working with prisoners, people held in Child and Youth Care Centers as well as people on parole.
  4. Nurses working with psychiatric patients;
  5. Educationists working with prisoners;
  6. Nature Conservationists involved in law enforcement and investigations;
  7. Identified categories of Immigration Officers;
  8. Centre-Based artisans working with prisoners; and
  9. Mine Health and Safety Inspectors.

In Ghana, concerned employees can expect to receive a Hazard Allowance, or a Risk and Unpopular Allowance. But in neighboring Senegal, workers are not legally entitled to any such allowances and benefits.

So as a business expanding to Africa, how do you know if you need to pay a hazard allowance to your workers? How do you know which ones qualify for it? And how much extra you should pay them?

How to ensure compliance in Africa?

It’s a hassle to find out this information, and to keep track of it in case there are any legislative changes – even more so if you have operations in several African countries. To ensure compliance and payroll accuracy each time, why not outsource these functions to a reputable payroll provider like Africa HR Solutions?

Why should you offer optional hazard pay?

Even if hazard pay is not mandatory in the African country you are operating in, here’s why you should still offer it to employees who operate in high-risk environments and settings:

  1. To incentivize your employees

Employees may be hard-pressed to take on certain risky jobs, or to carry out their duties in hostile climates. A hazard allowance can motivate workers to do these dangerous, yet necessary tasks. It also shows that you, as an employer, are aware of the risks workers take on, which makes workers feel understood.

  1. To reward them and boost employee retention

High-risk jobs often have high turnover rates. When employees feel valued, retention rates grow. It would cost more to replace several employees than it would to give your existing employees the hazard pay they deserve for their dedication.

Hazard pay rates

There are many ways to calculate hazard pay rates. Sometimes, it is paid as a determined per diem amount, other times as a percentage of the worker’s pay. In certain cases, hazard pay even goes up according to a worker’s seniority and years of service. Each case is different, and there are no cookie-cutter solutions.

Hazard Pay: helpful pointers

The following pointers will help you better understand hazard pay:

  • The level of risk associated with the job is a huge determining factor of hazard pay rates
  • Equality: if everyone performs the same task, the compensation rate should be the same.
  • It’s a good idea to make it clear to workers if they will receive their base rate in addition to hazard pay if the program is hourly. What happens to the worker’s pay when they take paid time off, take a leave of absence, or both?
  • Don’t forget to provide workers’ compensation details.
  • Before assigning staff members to dangerous jobs, you must keep them informed. You may be held liable if a worker is hurt or passes away as a result of not being informed of the unsafe conditions.
  • For the same reason, it’s important to supply regulation safety gear.
  • Once you’ve decided on a hazard pay policy together with your payroll and compliance service provider, codify it, get your staff to sign it, and retain the original paperwork for your own reference.

Next, make sure you adhere to the policy. If, after approval, workers are not given their hazard pay, they may file a lawsuit.

Make the safe choice for you and your workers

Africa HR Solutions is best placed to help you navigate hazard pay. With our presence in 50+ African countries, and experience of over a decade, we are the ideal partners for businesses like yours, which want to stay on the side of the law without all the pesky administrative paperwork.

Get in touch with our team now to find out how we can help you manage hazard pay and more with our payroll and compliance offers.

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