What’s Standing in the Way of Retail Workers Getting Hazard Pay? A Lot

Before the coronavirus pandemic, the phrase “front line” tended to conjure images of soldiers in warfare, hunkered down in dirt trenches like in the recent blockbuster “1917.”

Rarely would you have pictured the sales associate from your local Walmart.

But all that changed earlier this year when the COVID-19 health crisis reached America and the number of infections and mortalities began to spike, sending a frightened populous into stores to stockpile things like food, disinfectant and toilet paper.

“At the beginning of the pandemic, when people started stocking up like crazy, stores were really overwhelmed,” recalled Craig Rowley, a senior client partner at consulting firm Korn Ferry. “If you remember being in a grocery around that time they were moving merchandise all day long. And there was increasingly concern about safety with the virus.”

As a result, many “essential” retailers, such as Amazon, Walmart and Target — which remained operational during state and local lockdowns — implemented premium pay for workers .

But now, as the majority of states take steps to reopen, retail employees are either losing hazard pay or returning to work without it — even as the country’s confirmed coronavirus cases continue to rise. And experts say they have little choice in the matter.

An employee wears a face mask while collecting shopping carts outside a Target store, near Brighton, Colo., during the coronavirus pandemicVirus Outbreak Colorado, Brighton, United States - 17 May 2020
A Target employees collects carts while clad in a face mask in Colorado, May 2020.
CREDIT: David Zalubowski/Rex Shutterstock

What Some Are Getting Now

Korn Ferry surveyed more than 50 large merchants on May 6 and found that 43% of essential retailers are currently offering higher hourly pay, and 22% are providing both an hourly increase and temporary bonuses. For the hourly pay bump, the most common amount was $2 per hour.

According to Korn Ferry, the majority of retailers plan to cease offering premium pay at the end of May. That’s the case for Amazon, which said it will end its hourly increase and double overtime pay for warehouse workers before June. However, some companies have said they will keep the coffers open longer: Last week, Walmart announced it will hand out another $390 million in bonuses to workers on June 25, and Target said this week it plans to extend hazard pay through July 4.

Rowley explained that essential retailers are no longer facing the same issues around stocking and safety, so many no longer see the need to provide additional compensation.

As for non-essential retailers, such as apparel and footwear stores, which are beginning to reopen now, Rowley said, “Very few of them are thinking about having any premium pay. They’re only allowed to have 25% capacity used, so you don’t have the huge demand for product flowing through because there are fewer customers. And it’s a bit safer, with the lower capacity.”

However, some would argue that retail employees now face another new challenge, serving as the enforcers of company safety policies. Reports have surfaced around the country of altercations between store associates and customers who refuse to wear masks in stores.

Customers walk past an open shoe store in the Hamilton Town Center in Noblesville, Ind., . Indiana allowed real stores to open with capacity after restrictions put in place to curb the spread of the new coronavirus were rolled back. Less than 20 percent of the stores in the shopping center were openVirus Outbreak Indiana Reopens, Noblesville, United States - 04 May 2020
A local shoe store in the Hamilton Town Center in Noblesville, Indiana.
CREDIT: Michael Conroy/Shutterstock

The Legal Obstacles

Should employees in retail stores feel the urge to push for hazard pay in their own jobs, they face multiple hurdles — first on the legal front.

Michael Elkins, a labor and employment attorney based in Fort Lauderdale, Fla., said, “If they’re not in a union, [workers] don’t have much of any leverage. There’s no legal requirement [for companies] to provide bonuses or hazard pay. To the extent that businesses are doing that, they’re doing it out of the goodness of their hearts.”

On May 1, workers from multiple corporations — including Amazon, Target and Walmart — did initiate a “May Day” strike to push for improved health and safety standards as well as hazard pay, and some employers made efforts to respond — though whether that response was out of altruism or concern for the public relations fallout may depend largely on your level of cynicism.

Some workers and their families are taking legal action. Notably, a wrongful death suit — alleging that Walmart failed to implement proper health and safety standards to protect its workforce — has been filed in Illinois by the family of a Walmart store worker who died after contracting COVID-19.

However, Elkins noted that such cases will be difficult to prove. “That individual will have to prove that going to work was the proximate cause of getting COVID, and that’s going to be difficult because you can get it from anywhere. So unless that person was in a hazmat suit 24/7 and quarantined until the moment they walked into their employer, I’m not sure those cases are going to be very viable.”

Amazon fulfillment center, colorado, 2018
A worker pictured at an Amazon fulfillment center in Colorado, 2018.
CREDIT: Rex/Shutterstock

The Financial Obstacles

The other obstacle preventing workers from obtaining more compensation is the dire state of the economy. America has entered a recession, with historic levels of unemployment, which means that competition for positions will be fierce.

“Once the economy fully reopens, there’s going to be a shortage of jobs,” explained Patrick Gourley, a professor of economics at the University of New Haven. “You could try to bargain with your employer for higher hourly pay, but you’re doing that at your peril.”

But workers who were furloughed or laid-off at the height of the COVID crisis face a conundrum.

As part of the federal government’s CARES Act, individuals who filed for unemployment are now receiving an additional $600 each week, on top of their standard unemployment payout. For a store associate who typically works 40 hours a week at $10 per hour, they went from making $400 a week to depositing $800 or $900 each week, depending on where they live. They’re pocketing more money while staying in the safety of their homes.

Rowley said he’s heard from retailers that it’s a growing concern. But the CARES Act unemployment bonus is due to end July 31, so choosing the money over a job comes with risk. “If I call you back to work and you refuse to come because you don’t want to give up that $600, the job might not be there when you’re ready to come back,” he said.

And workers could lose out on both. While being questioned yesterday by the Senate Banking Committee, Treasury Secretary Steve Mnuchin encouraged companies to contact the Labor Department if any employees decline to return to work and have them removed from the unemployment rolls.

Gourley pointed out that up to now, the federal government has been propping up individuals and businesses with stimulus payments. “People aren’t feeling the pain yet,” he said. “But that’s not going to last and as soon as that runs out, you’re going to see attitudes change.”

Shoppers coronavirus
A shopper wearing a face mask passes by a store advertising discounts.
CREDIT: Javier Garcia/Rex Shutterstock

Possibility of Change?

Late last week, the Democrat-led House of Representatives passed another stimulus package, the $3 trillion HEROES Act, which includes $200 billion in hazard pay for front line workers, including retail employees, firefighters, nurses and doctors. It also would extend the unemployment bonus through January 2021.

By all reports, the Senate is unlikely to approve the proposed legislation in its current form, but some Republican senators have expressed a willingness to negotiate on more support for the country’s front line workers.

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