PA Establishes COVID-19 Hazard Pay Grant Program – July 31 Deadline to Apply

Pennsylvania recently established a COVID-19 Hazard Pay Grant Program to help employers in certain life-sustaining industries provide hazard pay to employees during the pandemic. The program is a reimbursement-based grant for employers who will be offering hazard pay – additional wages paid to employees for performing hazardous duty of work involving physical hardship in connection with COVID-19. The state has appropriated $50 million from the COVID-19 Response Restricted Account to the Department of Community and Economic Development (DCED) to be used for this grant program.

Timeframe to Apply

The state is only accepting grant applications through July 31, 2020, so employers must act quickly to take advantage of this program.

Eligibility

Businesses, healthcare non-profits, public transportation agencies, and certified economic development organizations may apply for funding for employers located and operating in Pennsylvania within one of the following industries:

  • Healthcare and social assistance
  • Food manufacturing
  • Food retail facilities
  • Transit and ground passenger transportation
  • Security services for industries listed above and commercial industries that were not closed as a result of the
  • Governor’s business closure order
  • Janitorial services to buildings and dwellings

Additional details about eligible industries and employers can be found in the program guidelines.

Use of Funding

Grant funds maybe used for hazard pay for direct, full-time, and part-time employees earning less than $20/hour, excluding fringe benefits and overtime. Funds may only be used to pay hazard pay for eligible employees for the 10-week period from August 16, 2020 through October 24, 2020.

Applicants may apply for up to $1200 per eligible full-time equivalent (FTE) and the hazard pay must be paid to the eligible employee over the 10-week period referenced above as a $3/hour hazard pay increase to their regular pay rate.

Employers may apply for a grant to provide hazard pay for up to 500 eligible FTEs per location ($600,000 maximum grant per location) and the total grant amount per employer is capped at $3 million.

How to Apply

Applications must be received by July 31, 2020. Applications must be submitted through the Electronic Single Application.

Tax Implications

The Pennsylvania Department of Revenue indicated that the additional hazard pay employees receive via the hazard pay rant is considered wages and subject to PA state income tax and income tax withholding.

Businesses are not required to include these grants as income for PA corporate income tax purposes. However, they may take a deduction for hazard pay they provide to their employees.

Additional Information

Pennsylvania has created a list of Hazard Pay Frequently Asked Questions which can be accessed here, and the full program guide is available here. For any questions, contact DCED Customer Service at 866.466.3972 or Email.

We will continue to provide updates as additional COVID-19 related developments emerge. We are also regularly updating our COVID-19 Resource Center, which you can access at any time here. In the meantime, if you have any questions about these or any other matters, please do not hesitate to contact your Kreischer Miller professional or any member of our team.

Information contained in this alert should not be construed as the rendering of specific accounting, tax, or other advice. Material may become outdated and anyone using this should research and update to ensure accuracy. In no event will the publisher be liable for any damages, direct, indirect, or consequential, claimed to result from use of the material contained in this alert. Readers are encouraged to consult with their advisors before making any decisions.