COVID-19 Federal Assistance e311


Premium & Hazard Pay

Is there a distinction between premium pay and hazard pay pursuant to the ARP? Under the ARP, can municipalities award hazard pay (or premium pay) retroactively?

Part I:
Unlike the Coronavirus Aid, Relief, and Economic Security Act (“CARES”) of 2020, the ARP does not define “hazard pay.” However, under the United States Department of the Treasury  (“Treasury”) Guidance for the Coronavirus Relief Fund (“CRF”), hazard pay is defined as “additional pay for performing hazardous duty or work involving physical hardship, in each case that is related to COVID–19.”[1] Thus, based on the legislative definition of premium pay and the Treasury’s definition of hazard pay, the primary distinction between them is that premium pay is not solely reserved for those performing “hazardous dut[ies] or work involving physical hardship,” but instead for all those performing “essential work.”[2] The Treasury Frequently Asked Questions (“FAQ”) on Coronavirus State Fiscal Recovery Funds (“CSFRF”) and Coronavirus Local Fiscal Recovery Funds (“CLFRF”) describe essential workers as “those in critical infrastructure sectors who regularly perform in-person work, interact with others at work, or physically handle items handled by others,” and provides a non-exhaustive list of roles that would be considered as critical.[3]

Part II:
Yes, Treasury encourages recipients to consider providing premium pay retroactively for work performed during the pandemic (as of January 27, 2020[4]), recognizing that many essential workers have not yet received additional compensation for their services during the pandemic.[5] The Treasury CSLFRF Interim Final Rule (“Rule”) indicates that third-party employers of essential workers are also eligible for premium pay.[6] Additionally, third-party contractors who employ essential workers in eligible sectors are also eligible for grants to provide premium pay.[7] Recipients have the discretion to select the third-party employers and contractors who receive those grants.[8] 

Last Revised: June 21, 2021

[1] Coronavirus Relief Fund, Frequently Asked Questions – FAQ B 3 (FRN Vol. 86 No. 10 at 4190), available at

[3] Coronavirus State and Local Fiscal Recovery Funds, Frequently Asked Questions (as of June 17, 2021) at 15 FAQ #5.1, available at:

[6] Id at 45.

[7] Id at 51.

[8] Id at 119.