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“Hero” Pay Raises Disappear

While Covid19 cases continue to soar in many states, many employers are cutting the temporary increases, so-called “hero” or “hazard” pay, given to employees at the start of the pandemic. Amazon, Rite Aid and Kroger have ended the practice while some companies, including Walmart and CVS, paid one-time bonuses instead. Amazon has opted to give out bonuses in lieu of the increased hourly rate – some as high as $500 per month. Target, among others, is extending their temporary extra pay. Many companies did not implement short-term pay increases at all.

Employers have indicated the extra hourly pay was meant to reward employees while they worked through months of wildly surging sales or increases in delivery volume. As those spikes have become less prominent and demand has become more consistent, some argue that there is less reason for the differential.

Employers can implement high hazard pay to deter employees from quitting en masse, but with high unemployment, workers are left with little leverage. Companies could see fewer applicants for low-paying essential jobs. Recent data from Indeed, the job search company, found that while postings for nonmedical essential jobs, like grocery store worker and delivery driver, have fallen less than average during the coronavirus crisis, job seekers are less interested in these positions than they were earlier this year, likely due to the risk of infection from Covid19. Indeed’s takeaway for employers: Posted hourly wages for nonmedical essential jobs have risen, but not enough to overcome apparent job seeker worries about health risks.