In this column, VTDigger business and economy reporter Anne Wallace Allen looks at the consideration of hazard pay for essential workers.
As the business group of record in the fight for a liveable wage, Vermont Business for Social Responsibility has fielded some unexpected challenges in the first few weeks of the Covid-19 economic crash.
Back when the Legislature was still considering everyday matters like social justice, VBSR was working overtime to get Vermont’s wage moved up to $15/hour within the next few years.
Then the coronavirus hit, with its accompanying business shutdowns. VBSR’s members found themselves competing for workers with the unemployment insurance system, which is offering to pay some of them more than $1,100 a week in state and federal unemployment benefits.
The unprecedented weekly payout has VBSR, the longtime champion of workers, and many other Vermont groups looking at the unintended consequences of a measure that was meant to help vulnerable Vermonters stay afloat in a crisis that has eliminated many thousands of jobs.
Jordan Giaconia, VBSR’s public policy manager, is one of many people hearing from employers who are worried their workers can make more money if they’re unemployed.
“Some of our essential (employers) as well as retailers have employees asking to be fired so they can collect additional money,” Giaconia said in testimony to the House Commerce Committee on April 9. “I have gotten particularly a lot coming from the manufacturing sector.”
The matter of unemployment pay is an interesting new problem that lawmakers are scrambling to correct as they field calls from business owners and managers with messages similar to Giaconia’s.
Part of the problem is that the guidelines around which workers qualify for benefits are unclear. Workers were told early on in the crisis that they could leave their jobs if they felt unsafe, and many did. Those over 60, or with preexisting health conditions, have been clearly warned that they’re particularly susceptible to the dangers of Covid-19.
State officials have sought to assure employers that workers should stay on the job if the company takes all recommended measures to clean surfaces and enable safe distances between workers. But the Vermont Department of Labor and other state agencies just aren’t equipped to determine which workers, among the 70,000 who have now filed unemployment claims, could reasonably and safely be working if there were a job for them. The Legislature’s omnibus Covid-19 bill, H.742 is pretty clear about the guidelines regarding unemployment insurance, except one area: Workers can leave and collect unemployment benefits if they face “unreasonable risk” at their workplace, and part of that definition is up to the discretion of the DOL commissioner. That leaves the door open for workers to leave for pretty much any reason, and wait for the claim to be adjudicated.
Accordingly, state officials have turned to the concept of a raise for the people putting themselves at risk in essential jobs. Some grocery stores and other employers have already done this, and the state has boosted the pay for some state workers by as much as 20% until May 9.
That’s what Giaconia recommended to lawmakers on April 9.
“We strongly support the Legislature offering additional pay to Vermont’s essential workers to achieve greater parity with unemployment benefits they receive,” he said. Some employers have already taken this step themselves; many have said they are seriously considering it. But not all companies have the means to raise pay enough to counteract the federal government supplement. The feds are adding $600 per week to every state unemployment check — the equivalent of a $15-per-hour raise.
Giving money to all essential businesses for payroll is itself not simple, said Rep. Charlie Kimbell, D-Woodstock, noting that a lawn service providing grub and tick treatment is considered an essential business under the guidelines published by the state Agency of Commerce and Community Development.
“I don’t think we necessarily want to subsidize them with extra hazard pay,’ said Kimbell. “I don’t want to suggest that we should for all businesses now deemed to be essential, to then figure out which of them are eligible for an increase in pay. It’s difficult enough to decide who can continue to operate.”
Nonetheless, businesses want lawmakers to do something about the situation. In a letter April 9, the state Chamber of Commerce asked U.S. Rep. Peter Welch and U.S. Sen. Patrick Leahy to take another look at the $2 trillion relief package Congress passed at the end of March.
“The level of compensation currently available to UI claimants is often difficult or impossible for employers to compete with through regular payroll allocations,” the group said. “We recommend this aspect of the CARES Act be reviewed and adjusted to address this growing problem.”
Austin Davis, head of government affairs for the Lake Champlain Chamber, said a private-sector pay bump would help workers and the economy.
“I think they are smart and going to make the choice that yields the best outcome for them and their family,” he said of the workers. “Some will see that as leaving their job and taking a higher salary on unemployment and the fact their job needs them won’t matter. Others will do that math and still stay at their job because that will be important to them.”
A group convened by Senate President Pro Tem Tim Ashe, D/P-Chittenden, plans to bring a proposal to senators this coming week, said Sen. Chris Pearson, P/D-Chittenden. Lawmakers have struggled to come up with a name for this extra money for private sector workers, with many rejecting the voter-friendly “hero pay” and the more recent “hazard pay.”
“We’ve been struggling with that,” Pearson said. “It’s more like a thank-you credit.”
