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Hazard Pay Differential

Applicability 


General Schedule (GS) or equivalent employees may earn a hazard pay differential.  All others are ineligible (Title 5, Code of Federal Regulations (CFR) 550.902).  


Entitlement 

The head of an operating unit or a designee shall pay an appropriate differential to an employee who performs a duty specified in Appendix A to Subpart I of 5 CFR 550 provided the physical hardship or duty has not been considered in the classification of the position (5 CFR 550.904).  


However, the head of an operating unit or designee may approve payment of a differential even when the hazardous duty or physical hardship has been taken into account in the classification of the position when: 

  1. The actual circumstances of the specific hazard or physical hardship have changed from that taken into account and described in the position description; and 
  2. Using the knowledge, skills, and abilities described in the position description, the employee cannot control the hazard or physical hardship; therefore, the risk is not reduced to a less than significant level. 

Categories for which work is payable under a hazard pay differential include, but are not limited to: work in rough and remote terrain, traveling under hazardous conditions, snow or ice removal operations, water search and rescue operations, hazardous boarding or leaving of vessels, working at high altitudes, exposure to toxic chemical materials, or diving.  


Definitions 

Physical hardship means duty involving physical hardship that may not in itself be hazardous, but causes extreme physical discomfort or distress and is not adequately alleviated by protective or mechanical devices, such as duty involving exposure to extreme temperatures for a long period of time, arduous physical exertion, or exposure to fumes, dust, or noise that causes nausea, skin, eye, ear, or nose irritation (5 CFR 550.902).


Hazardous duty means duty performed under circumstances in which an accident could result in serious injury or death, such as duty performed on a high structure where protective facilities are not used or on an open structure where adverse conditions such as darkness, lightning, steady rain, or high wind velocity exist (5 CFR 550.902).


Hazard pay differential means additional pay for the performance of hazardous duty or duty involving physical hardship (5 CFR 550.902).

Considered in the classification means that the duty constitutes an element considered in establishing the grade of the position—i.e., the knowledge, skills, and abilities required to perform that duty are considered in the classification of the position (5 CFR 550.904(c)).


Schedule of Rates 

A schedule of conditions and rates of pay for hazardous duty can be found in Appendix A to Subpart I of 5 CFR 550.  Regardless of the number of hazards encountered in a day, total hazard differential pay for any day may not exceed 25 percent of the employee's rate of basic pay for that day (5 U.S.C. 5545(d)(2)).


Hours to which Hazard Differential Pay Rates Apply 

Hazard differential pay is computed on the basis of hours in a pay status.  Any amount of actual exposure during a calendar day entitles the employee to hazard pay for all compensable hours that day.  If a tour spans a two-day period, all hours of work will be considered to have been performed on the day the work began (5 CFR 550.905).  


Effect of Excused Absence and Leave

Hazard differential pay may be paid during hours of paid leave if hazardous duty is performed on a day which paid leave is taken.  For example, if an employee performs a hazardous duty for 1 hour and then takes annual leave for the 7 hours remaining in their workday, the employee is paid hazard differential pay for the entire 8-hour workday (5 CFR 550.905).


Hazard differential pay may not be paid for periods of leave without pay.  Hazard differential pay may only be paid while an employee is in a pay status.  

Recording Entitlement 

Hazard differential pay must be coded for payment using the Department of Commerce’s automated time and attendance (T&A) system (i.e. webTA).  


Termination of Hazard Pay Differential


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; or
  • Protective or mechanical devices have adequately alleviated physical discomfort or distress (5 CFR 550.906).

Additions to the Schedule of Hazard Differential Pay Rates 

Amendments to Appendix A to Subpart I of 5 CFR 550 shall be submitted with appropriate documentation to the Office of Personnel Management (OPM) through the Director for Human Resources Management via the Principal Human Resources Officer.  Justification supporting a request for amendment of Appendix A to Subpart I of 5 CFR 550 must explain the: 

  • Nature of the duty; 
  • Degree to which the employee is exposed to physical hardship or hazard; 
  • Length of time during which the duty will continue to exist; 
  • Degree to which control may be exercised over the physical hardship or hazard;
  • Rate of hazard pay differential considered appropriate for approval by OPM; and 
  • Estimated cost to the agency if the proposed amendment to Appendix A to Subpart I of 5 CFR 550 is approved (5 CFR 550.903).  

Relationship to Other Payments and Pay Under Other Statutes 


Hazard differential pay under 5 U.S.C. 5545 is in addition to any additional pay or allowances payable under other statutes.  It is not basic pay for purposes of computing additional pay or allowances payable under other statutes, i.e., hazard differential pay should not be used to compute overtime, holiday pay, or Sunday premium pay, the amount of retirement, Thrift Savings Plan contributions, and life insurance deductions (5 CFR 550.907). 


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.

An employee may not be paid hazard differential pay for hours which they receive annual premium pay for regularly scheduled standby duty, annual premium pay for administratively uncontrollable overtime work, or availability pay for criminal investigators (5 CFR 550.905).  

Hazard differential pay is not subject to the biweekly maximum limitation on premium pay under 5 U.S.C. 5547.  However, it is subject to the aggregate compensation limitation under 5 U.S.C. 5307, which limits an employee's aggregate compensation to the rate payable for level I of the Executive Schedule at the end of a calendar year

 

Reviewed by OHRM, September 2020.

References: 5 CFR 550.902, 550.903, 550.904, 550.905, 550.906, 550.907, Appendix A to Subpart I of 5 CFR 550; 5 U.S.C. § 5545, 5 U.S.C. § 5307; 5 § U.S.C. 5547; OPM Frequently Asked Questions, “Pay & Leave: Hazardous Duty Pay,” ask.FEDweek.com, “Hazardous Duty Pay to Federal Workers”